Cleardocs have you used them?

[Georod3]

Tax ... lets not start that one ..

The AUS tax system is mind numbing ... plus the cost of running it etc..

hopefully one day they might see to make that simple ..

however I think the web is far to knotted for that to happen, they would never be able to untie it without breaking everything ..

plus now carbon tax .. where does it end ! local, state, federal, the actual list is endless.. and the book/s are inches thick!

anyway ... tax my favorite thing only second to toll roads .. (I cant understand why I pay tax and then have to pay for basic infrastructure)

 

[coastymike]

GeoRod

Thanks for clarifying that. Always happy to be mistaken. Certainly not offended by any comments. I see the cost of the trust as being about $250 - $400 the rest is getting it right.

Agreed the additional costs should always be for professional advice. Issues that are often missed and what forms part of the professional advice.

1. Appointor. Very common to see a sole appointor. Issues can arise later on if setup for asset protection and the individual as appointor goes bankrupt. Trustee in bankruptcy steps into the role as appointor and removes the trustee. Should consideration be given to two appointors to mitigate these issues for the future.

2. Individual or Corporate trustee. Setting up a discretionary trust is usually done for asset protection as the primary objective. having an individual as trustee really destroys the asset protection. Why have a discretionary trust in the first place if using an individual as trustee. See issues as well re bankruptcy.

3. Beneficiaries. Who should be listed. Terry raises the very valid issue that banks will usually require guarantees from the listed beneficiaries. Have clients been advised of this.

4. Should there be a controller for the trust ? Some asset protection and estate planning benefits from having a controller. Cleardocs deed don't have a controller.

5. Is it better to have a unit trust over a discretionary trust ? Can't move resi property from a DT to an SMSF later on. DT in NSW also subject to higher land tax rates. Asset protection issues can be mitigated later on when equity from units becomes an issue. DT for resi property in my view is fairly limited.

6. Has Richstar Enterprises been considered. Only an interlocutory order but needs to be considered. Who should sit in each role to ensure you distinguish the structure from Richstar. There is one key role to change that makes it very easy to distinguish from Richstar. Usually not considered but the most important in my view.

Anyway that is but 6 points to consider. There are many others. That is what you paying the $1k - $2k for.

 

[Georod3]

All good !

Glad we are good .. i just started here on Somersoft ! I didnt want to kick off on the wrong foot !

this site comes up on Google quite a bit ... thats how i ended up here..

have a great weekend ... whats left anyway ..

 

[handyandy]

I don't see why the immediate hostility show for someone asking as to whether anybody has used an online trust deed.

To me its a fair and reasonable question and has belatedly brought out valid points as to some of the intricacies involved with trust.

These points educate everyone and affords those who want a platform for structuring further questions for their accountant. A good outcome.

To address some of the points raised here is a link regarding the interlocutory order. (I thank Coasty for bringing it up)

http://www.cleardocs.com/clearlaw/trusts/asset-protection-outcomes-challenged.html

Cheers

PS forgot to include further link How to Guide - discretionary Trust (may not work if you use other than firefox as I note it has firefox as the browser in the link

http://www.google.com.au/search?q=c...s=org.mozilla:en-US:official&client=firefox-a

 

[nathank]

Hrmm, the interlocutory order in this case is very interesting... I had just setup a family DS with the purpose of controlling investment for my children with this mob (about $450):
http://www.acis.net.au/

My wife and I are trustees (i.e. no corp trustee) and the thing that is interesting (and worrying) is this bit:

Facts A trust:

• with a defendant as current trustee and a member of an open class of beneficiaries (with other family members and a range of charities); and
• in which the defendant had a discretion to distribute 39% of the income or capital to any beneficiary.

I guess i'm a bit worried now my trust deed has 3 broad classes of discretion; named beneficiaries (i.e. my two kids), family and companies / trusts.

I guess the the key part for consideration is:

The defendant had effective ownership of at least 39% of the trust property for the purposes of the Act.

So am i right to read that any DS should limit the distribution discretion for any trustee to < 39% where the TD has an open clause that allows distribution to beneficiary classes that could include the trustees?

I was pitched by chan & naylor to setup a hybrid DS before the government mostly poo-pooed those... and i was recommended by a friend to read this book: http://nickrenton.com/trd.htm. It was a great concise introduction to trusts i would recommend any newbie reading.

 

[Terryw]

Hrmm, the interlocutory order in this case is very interesting... I had just setup a family DS with the purpose of controlling investment for my children with this mob (about $450):
http://www.acis.net.au/

My wife and I are trustees (i.e. no corp trustee) and the thing that is interesting (and worrying) is this bit:


I guess i'm a bit worried now my trust deed has 3 broad classes of discretion; named beneficiaries (i.e. my two kids), family and companies / trusts.

I guess the the key part for consideration is:


So am i right to read that any DS should limit the distribution discretion for any trustee to < 39% where the TD has an open clause that allows distribution to beneficiary classes that could include the trustees?

I was pitched by chan & naylor to setup a hybrid DS before the government mostly poo-pooed those... and i was recommended by a friend to read this book: http://nickrenton.com/trd.htm. It was a great concise introduction to trusts i would recommend any newbie reading.

The Richstar case was one involving the definition of property under the Corporations Act. It also involved an ASIC investigation. Both would unlikely ever apply with the average investor. But, it is still a good idea to do some simple strategies to strengthen the set up of the trust so it can't be seen that anyone person has sole control over the the trust. Make sure none has any interest in the trust, but just the right to be considered by the trustee. If you trustee has any complusion to distribute to a certain beneficiary then this would amount to 'property' under both the Corporations Act and the Bankruptcy Act.

Interestingly, Richstar was a Federal Court matter under Justice French. French was also on the Spry v Kennon case regarding trusts and family law which so called 'attacked' trusts also. Now French in on the High Court.

 

[Player]

Peace

I wasnt mocking anyone ..

the Wrong wrong wrong referred to CoastyMike thinking I was connected to Cleardocs .. I'm not in anyway at all............

Ahh OK, thanks for clarifying that. I misunderstood that aspect of your reply.

As for the mocking, perhaps making light of the fees professionals charge especially the two key posters on this thread and claiming they are the ones with agendas (you did say that) isn't the most endearing nor empowering debut to a forum.

Regardless, we have had some high content posts that should serve well those folks looking to pursue the path of investing in vehicles other than their own name.

As with everything caveat emptor. Undoing rushed decisions once the trust has invested and carries assets, can prove costly. Measure twice and cut once is the chippies maxim.

Peace.

 

[nathank]

Interestingly, Richstar was a Federal Court matter under Justice French. French was also on the Spry v Kennon case regarding trusts and family law which so called 'attacked' trusts also. Now French in on the High Court.

indeed! appreciate the insight!

 

[Rob G.]

Reasonable and worth every penny I am sure. The $1800 odd saving between using an expert and an online service is chickenfeed compared to what you are going to invest in the entity or purchase with it or operate through it etc. Go see a professional

Ditto ...

I noticed that supermakets are now selling DIY dentistry repair kits.

They come complete with instructions !


Cheers,

Rob

 

[Georod3]

We have some interesting feedback on this one.. the reality is that the laws can change and affect any trust that is set up..

All I was saying is that it seems to me for the basic use of income splitting, you would imagine that a "standard" type document might apply..

Add to that the reality that setting up a family trust probably has a finite amount of variables anyway.. as most things do

Cheers all

 

[Terryw]

We have some interesting feedback on this one.. the reality is that the laws can change and affect any trust that is set up..

All I was saying is that it seems to me for the basic use of income splitting, you would imagine that a "standard" type document might apply..

Add to that the reality that setting up a family trust probably has a finite amount of variables anyway.. as most things do

Cheers all

Another what if....?

Q. what if your parents were on the pension and you set up the trust with them as a beneficiary?
A. They could end up not qualifying for the pension.

A trust is not like a company, there are many many variables, infinite maybe!

 

[Rob G.]

We have some interesting feedback on this one.. the reality is that the laws can change and affect any trust that is set up..

All I was saying is that it seems to me for the basic use of income splitting, you would imagine that a "standard" type document might apply..

Add to that the reality that setting up a family trust probably has a finite amount of variables anyway.. as most things do

Cheers all

I think that is what the responses have been trying to tell you.

There is no such thing as a 'standard income splitting arrangement'.

Many objectives are mutually exclusive for tax, asset protection and succession planning.

Consequently, it is necessary to compromise with entities and financial arrangements.

Cheers,

Rob

 

[Lofty]

I always work on the basis that 'I don't know what I don't know' ;-) and with the large amounts of money involved with these issues, I always take and pay for good professional advice. Just another opinion.

Cheers, Paul

 

[Corey Batt]

Interesting thread, I'm in the process of looking for an accountant who can assist in setting up a company and trust structure.

From what I can see, in a structure wherein a company is wholly owned by a disc. trust, it is advisable to have the trustee to be a shell company, as litigation against the company would only leave the shell companies assets (none) exposed?

 

[Aaron_C]

Interesting thread, I'm in the process of looking for an accountant who can assist in setting up a company and trust structure.

From what I can see, in a structure wherein a company is wholly owned by a disc. trust, it is advisable to have the trustee to be a shell company, as litigation against the company would only leave the shell companies assets (none) exposed?

The trustee (i.e. the shell company) would be sued as trustee of the trust, leaving only trust assets exposed. That is how it should work.

 

[RPI]

The trustee (i.e. the shell company) would be sued as trustee of the trust, leaving only trust assets exposed. That is how it should work.

I agree with what Aaron said. A trustee is able to be indemnified out of the trust assets. So using a company does not mean that the trust assets are untouchable, it means that your other assets are protected.

 

[RPI]

The trustee (i.e. the shell company) would be sued as trustee of the trust, leaving only trust assets exposed. That is how it should work.

I agree with what Aaron said. A trustee is able to be indemnified out of the trust assets. So using a company does not mean that the trust assets are untouchable, it means that your other assets are protected.

 

[Terryw]

And if the trust deed does not allow a trustee to be indemnified out of the trust assets then the director of the company that is trustee could be personally liable for the debts of that company when it was acting as trustee.

 

[Georod3]

I'm enjoying this thread I think we are covering some great ground, especially for people new to the family trust model and wide scope of options.

Great discussion and great content, a quick thank you to everyone for all the input.