Forget about trusts!
- Thread starter bianca
- Start date
I believe he is referring to the PIT (Property Investing Trust) that Chan & Naylor were sprouting. I had heard that there were some problems with this though, so not sure if they still do them.
hi skater, yep that was the one, forgot what they called it, sounded fantastic at the time until i did more research.
yorkie
Can you please define and explain correctly?
This is correct.
But if you do what all those "experts" tell you and borrow in your personal name to buy units in a trust, or to lend to a trust, then those units or the loan is an available asset and you may lose it. As are any shares of trustee (or other) companies.
This is the part that people ignore.
As for a $1 mortgage, with all due respect that's kids stuff. Get real.
The carpet example is negligence. Look after your IPs.
What surprises me is that after all these years so many people still don't even understand the basic concepts of assets held in trust.
They are not owned, under, over or anything else but held in trust.
Do yourselves a favour and do your homework, which does not consist of asking a trust deed salesperson if you need a trust deed. Nor attending his seminar on the greatness of them either.
Because he interpreted the question differently:
can be but (a) this is only the case initially. any cap gains or profits are ring fenced within the trust and (b) most actions are poorly funded due to risk aversion. After looking at someone else go through bankruptcy there was no mention of the trusts loans, units held etc probably because its just all too hard in practice and lawyers are just way too expensive to go on a witch hunt for somehtign that will likely prove fruitless anyway
plus the loans etc should be held in the name of the partner not exposing themselves to as much risk as the other e.g. company gaurantees
Ausprop
I agree. I think one of the objectives is to try to ensure that things are difficult for the other party so the legal costs of pursuing a course of action makes it either too expensive or the other party agrees to an early settlement.
What if the units in a unit trust are held by a chairtable trust setup in the Isle of Man. Not for tax minimisation but then you have a totally different legal jurisdiction to deal with and the associated legal costs. Some people just give up and say it is all too hard. It is not until you have been sued or subject to legal action that these things become of interest.
I agree. I think one of the objectives is to try to ensure that things are difficult for the other party so the legal costs of pursuing a course of action makes it either too expensive or the other party agrees to an early settlement.
What if the units in a unit trust are held by a chairtable trust setup in the Isle of Man. Not for tax minimisation but then you have a totally different legal jurisdiction to deal with and the associated legal costs. Some people just give up and say it is all too hard. It is not until you have been sued or subject to legal action that these things become of interest.
trusts anyone know of it??
yep thats basically it, not the sueing bit just the "ÿou need them bit"
sorry for any confusion terry.
yorkie
yep thats basically it, not the sueing bit just the "ÿou need them bit"
sorry for any confusion terry.
yorkie
Maybe i did'nt explain myself, I'll try again.
I was'nt refering to any trust activity/loans at all. Only personal assets.
To make it clearer, if I were to obtain judgement in my favour against you (or you owed me a considerable amount of money), you'd have two choices:
pay up or declare bankrupt.
If you (or others) think it's easy to just to declare bankrupt, then you have no idea what world of financial hurt it will be.
So unless you have a large amount of net equity so that no investing is neccessary for a while, then it may be worth it. Otherwise you will be financially crippled for a long time, and that record on your back.
So the question then becomes at what price is bankruptcy an option?
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coastymike, you can skip your legal obligation just because an owner trust is OS if your the trustee for that trust and an AU resident.
A unit trust with OS unit holders operating here still needs to comply with the local laws.
It's just not that easy, but there a few intersting cases like Rivkin, to mention a recent one.
And some more that worked well like Bond, Scase, Murdoch and Hutchence.
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its a fair point but first of all you need to be in a position where bankrupcty is an option, not a foregone conclusion. at least with your assets out of reach it just becomes an economic decision. The guy I saw go through this had no choice, the liabilities exceeded the net assets of both him and his trust, so he was stuffed regardless. At least with the trust he was left with a nice nest egg. he can continue on in a nice job and his wife is now the investor in the relationship. not a whole lot has changed for him apart from the stress of it all
option c is you cut a deal that returns them a lot more than option b and a lot less than option a
Piston Broke
Not saying you will escape your legal obligations but you force the other parties to incur expenses by proving that the units are held on trust for your benefit. If it was charitable trust setup in say either the Netherlands Antilles, Cayman Islands, Isle of Man, etc then you have to go to the legal expense of proving who owns the assets. Throw in some nominee directors and I can see the legal bill easily going into the hundreds of thousands of dollars. You have to have big pockets to fund that.
Not saying you will escape your legal obligations but you force the other parties to incur expenses by proving that the units are held on trust for your benefit. If it was charitable trust setup in say either the Netherlands Antilles, Cayman Islands, Isle of Man, etc then you have to go to the legal expense of proving who owns the assets. Throw in some nominee directors and I can see the legal bill easily going into the hundreds of thousands of dollars. You have to have big pockets to fund that.
Alright, thanks Yorkie and Rob, I see what you were thinking now.
I agree, sort of.
If you have your assets out of reach then it is unlikely the proceedings will go very far in the beginning because of the possibility the other party will incurr high costs and get nothing in return.
If the other party does litigate and obtains a judgment against you they still have to enforce it to get anything. This will be more costly still in terms of legal fees, plus they have to find the assets and then attack the owners of them etc. Having a judgment against you will hurt your borrowing capacity.
They then have the option of bankrupting you. But this also will cost money in fees and legal costs. They may not even do this if it will lead nowhere, but may do it as a form of punishment or revenge. If bankrupt this will last for 3 years maximum and you won't be able to go overseas. It will hurt borrowing more than a judgment though.
But, even if you do get this far and are bankrupted you can come out of bankruptcy early by making an offer to the bankruptcy trustee. eg. your trust may lend your wife some money and she offers it to the creditors. 10c in the dollar maybe. They can see they will get nothing else so may take this and allow you out of bankrupcty early. One of my clients did this and was out in 3 months. She will still have the fact that she was bankrupt on her CRAA for 8 years though.
Bankruptcy is painful, but if you already have a judgment against you it is not going to hurt that much more, but it will hurt probably a bit longer. You can still recover and proceed with investing etc using your spouse and/or friends etc behind new trusts.
Hi. All The question here Is why trust and not the issues when finders are chainh for there money or liabilities but just to let you all know thhat there Are alot of ways to move even if bankrupt and alot of ways out also but they are not for a board I am working with receivers daily and it's a very interesting place to be do trusts /companies secure Assets yes should you use them your call oils I hold any other way no this is from a iPhone so have no idea how to paragrath or ... So do that as you read
I was going to ask you to repeat yourself..........but as it is posting from an iphone, I understand!!
I don't like texting from my iphone.....sure it is better than T9 or whatever it is, but I like the blackberry's where you can use both hands. (I haven't mastered both hands on the iPhone, as the left thumb is somewhat hard to navigate on the screen.
Cheers,
F
