establishing a family trust

My husband and I are in the process of researching and refinancing our investmdent portfolio. We were wondering how to set up a trust account and what banking facilities we need to do this. Can we borrow in the trust's name or do we borrow in our names and lend it to the trust? Do we purchase next property in trust name or in our own names? How are funds distributed between members annually or can this change at will? What other ways can we use the trust to ensure tax minimisation occurs?
Enough questions for now, the answers will be too lengthy otherwise.
In anticipation of your words of wisdom,
I suggest you do two things: get and read the book on trusts by Renton which is a really excellent basic book on trusts. Then buy and read Dale's book on tax battles, which directly addresses the real estate issues involved.

You can get Dale's book by emailing him directly. I highly recommend it. As Dale will tell you, your own detailed circumstances will best define how to structure your affairs. Dale can set you up with an off-the-shelf trust with a very good trust deed. The deed is important as that can't be changed.



Don't rely on this. But this is my own understanding (having just gone throught the hoops).

I set up a trust at the same time my offer on a property was accepted. In my case, the trust stuff came through in time for exchange. But if it had not, I believe the exchange could have gone through (with the approval of the vendor) with the name on the contract as myself "or nominee".

I could borrow in the trust's name, that was not a problem. But it did cause a bit more red tape.It did mean that stuff had to be referred to the bank's head office, rather than be dealt with at the local level.

I did the banking arrangements as part of NAB's Professional Choice package.

They had included fees in the lend- which should not have been included, as I don't get any extra fees charged as part of the package. I had those fees exc;uded- thought that's a bit of a grey area.

Trusts though may not work if the proeprty is negatively geared. I can only distribute profits, not losses.

The trustee can choose to distribute the profits to whatever beneficiaries (named in the trust I think). The distribution can be changed at the discretion of the trustee (hence "discretionary trust").

I have heard a whisper that trusts may influence the distributions of assets should something happen between the partners. Just make sure that's covered.
While we are on trusts......

Does a trust distribute non-cash deductions like depreciation? What happens if a trust is cash flow positive but profit neutral? Can you distribute some of the positive cash flow tax-free?

Bemused, Andrew.
Hi all,

I too am inerested in family trusts so I'd like to buy the Renton book suggested. When searching I found 2 specifically that dealt with family trusts and another which touched on it.

Family Trusts ISBN 1876627662
Family trusts - A plain English Guide for Australian Families of Average Means ISBN 1875857451
Family Financial Affairs ISBN 1876627794

He seems to be a prolific writer.
Could people comment on the merits of each ?
Specifically the difference of the first 2 trust titled books.

Also where's the best place to buy one or some, via the net and have posted OS ? API seems more expensive than Collins Bookstores.

Thanks all
Another question,

Currently we are living in Japan.
If my wife is non-resident & non-citizen can she still be included in my Ausrtralian Family trust ?

Obviously this is a critical question for me, though I guess not one that gets asked too often and thus may not be in most books on the topic.
The "Family trusts - a plain English..." is the second and improved edition of the first. Every library in Australia should have it.


I am no expert but for what it is worth, my daughter in law is also Japanese non resident and no citizen and she is included in our family trust. There was no mention at all about her not being eligible however I did not specifically question this.

Cheers Donna :D
Does a trust distribute non-cash deductions like depreciation? What happens if a trust is cash flow positive but profit neutral? Can you distribute some of the positive cash flow tax-free?
That wouldn't make a lot of sense. I would imagine the Trust can only distribute profits only after its overall tax position has been taken into account.

Otherwise, you could have a so-called "negatively geared" property held in a trust making distributions purely on the "incoming cashflow" side of the equation, and ignoring the outgoings.