Help....Where to 'hide' the Trust??

[Mamaof3]

i wasn't talking about lying on the loan application...from what i've gathered, there is a way of buying through the Trust without it being so obvious....

anyway, we have run out of time and have submitted a new loan app through a mortgage manager with a product that suits our needs...just means more time resubmitting as we only had the trust set up and stamped yesterday so a week wasted but at least now it should go through no probs.

 

[Piston Broke]

.......If the loan application has the question on it (as many I have seen has)..... "does this loan relate to a trust?" Then to answer no here, and sign it is Fraud - straight up. I know of people getting prison sentences (suspended) for such answers recently.

It's in my name, and I'm the guarantor.
It's nobodies responsibility but mine.
It relates to nobody else but me.

Prison? I think your missing a lot of the puzzle, and their story.
It's fraud when the bank wants to be paid and you try to extricate yourself from the responsibilities that your contracted to.
And a lot of the so called "smart" accountants try to play the game both ways in an attempt to fudge it in the direction that suits them, when it suits them.
That's why the ATO is cracking down on them, and so it should.

 

[Rob G.]

Most postings miss the point.

The loan is a contract.

If the bank has a condition that it must only deal with individuals not acting in the capacity as a trustee, then to proceed would be a breach.

The bank would be entitled to various legal and equitable remedies against you.

Do not think that the "trust property" would be out of reach either.

Do not think that the "beneficiaries" would escape any liability where they participate or approve either.

Cheers,

Rob

 

[Piston Broke]

If the bank has a condition that it must only deal with individuals not acting in the capacity as a trustee, then to proceed would be a breach.

The law says I need not disclose anything other than my details, and nothing else.
Taking it further, if I've made a will, do I have to disclose that I'm acting as a trustee for the beneficiaries of my will?
Does everybody with a will need to declare that they are purchasing as a trustee of the beneficiaries of their will?

Do not think that the "trust property" would be out of reach either.
Do not think that the "beneficiaries" would escape any liability where they participate or approve either.

That you post this tells me you did not understand my post.
I can't make it any clearer than this:
Avoiding creditors, and tax is fraud. Acting as a trustee as per law & trust deed is not.

Though I will restate that most people don't understand what a trust is, and that includes bankers, MBs, and accountants selling trust deeds.
Heck most lawyers ran a mile from it when they studied law and did only the minimum necessary to pass.

And after doing many rounds over the years, it became obvious my good'ole suburban lawyer & accountants know more than those touting flash city slickers.

 

[RPI]

I agree with Rob if there is such a question or condition on the loan contract regarding acting in one's own capacity etc and this was answered negatively than that would be deemed fraudulent misrepresentation. This is regardless of what the trust deed says, the contract is between the lender and the person signing. Bank would win hands down. However if there was no such question/ condition, then no misrepresentation has been made and go your hardest.

 

[Piston Broke]

I agree with Rob

In what capacity or experience?

the contract is between the lender and the person signing.

Pretty much my point.

 

[GeeJones]

Piston Broke..

It would be nice if mortgage documents were just nice agreements signed between two parties and you only commited fraud when you tried to extricate yourself from responsibilities with the bank.

I simply say again if you sign a contract or loan document that you know is untrue it is FRAUD. The offence occurs in the signing of the document not the result of the transaction. And it is not only the bank that has the power to take action. There are many cases going through right now with people being charged with making false statements on mortgage documents. It is a hot topic. Its going to get hotter with ASIC monitoring.

There is a new section of the crimes Act which replaces the old
Section 178BA of the Crimes Act. (Obtain a financial advantage by deception) It is an all encompassing section relating to frauds. Basically if you do something to make another give you money based on false information it is an offence that carries a maximum of 10 years in prison. If a broker assists a person to submit an application which they know to contain false information then they can be deemed a principal in the second degree.

Yeah you may not have a problem unless the bank finds out and complains to the Police, but the cross data matching and information sharing at Government Level - especially on the ATO site is extensive. Especially if you claim negative gearing or depreciation on properties. Dont fudge it.

Mamaof 3 I was not suggesting it is the case here or what is intended to be done. I only suggest to be careful of the documents you sign and the wording on them. That is where acting lawfully as a trustee or not is measured. Congrats on the new loan - onwards and upwards.

 

[Rob G.]

That you post this tells me you did not understand my post.
I can't make it any clearer than this:
Avoiding creditors, and tax is fraud. Acting as a trustee as per law & trust deed is not.

Though I will restate that most people don't understand what a trust is, and that includes bankers, MBs, and accountants selling trust deeds.
Heck most lawyers ran a mile from it when they studied law and did only the minimum necessary to pass.

And after doing many rounds over the years, it became obvious my good'ole suburban lawyer & accountants know more than those touting flash city slickers.

Fact: You are aware that the bank will not lend to a trust at that level of interest and security. You have either had express or implied notice.

Fact: You apply for a first mortgage over residential property on the basis that you have full legal and equitable title to the property, and it is to be an owner/occupier arrangement ... the highest level of security considered by the bank.

Leaving aside any criminal action, the bank could have an enormous range of equitable remedies.

If the bank suffered a loss, the trustee is personally liable. Also, the trust property and even the beneficiaries are liable if they knew or approved.

Also, given that the loan was conditional on a purpose ... the bank might apply to court to declare a constructive trust over the property purchased with the money.

This means that the entire property including income and capital gains is held on trust for the bank ... much more valuable than a mere mortgage if the property has gone up in value. Painful as well when you have to disgorge all profits made.

A trust is an instrument of equity (conscience), I find it interesting that you think it can be used as a cloak to receive an advantage at somebody else's expense (an equitable fraud).

I believe you are confusing the situation with a bare trust used to acquire assets whilst hiding the true purchasers identity ... but *NOT* to deceive for an advantage.

Get some serious legal advice before proceeding, I am sure you have not yet done this.

Cheers,

Rob

 

[Mamaof3]

grossreal - its residential low doc.

 

[Piston Broke]

Fact: You are aware that the bank will not lend to a trust at that level of interest and security.

The bank is not lending to a trust. And that's the whole point.

As for the rest of the post, your just wrongly implying what I have clearly NOT stated.
And a trust is NOT a legal entity, though in some instances it is treated as such.

So are you & GeeJones lawyers? You sound like accountants to me.

 

[GeeJones]

In this scenario as proposed the bank is being asked to lend to a trustee of a trust who wants to find a way to "hide" that fact and so get the loan as if they were not a trustee. If this is not disclosed when asked on a legal document it is quite simply an offence. Liable to remedy as Rob pointed out.

Its fairly black and white. The level of action taken could be very different.

Non disclosure of a fact to the bank is not acting as a trustee as per law - as you put it.

You must be the accountant here as you say -"smart" accountants try to play the game both ways in an attempt to fudge it in the direction that suits them, when it suits them. That sounds a bit like your arguement.

 

[Piston Broke]

Where have I ever posted that extrication of financial commitment & responsibilities?
Absolutely never.
It's those accountants & lawyers selling trust deeds that base their whole sales pitch on having it both ways, with the misconception of asset protection to go with it.
A trust arrangement is no guarantee of asset protection. Never has been.
I'll quote my own post:

If you buy in your own name, your personally liable.
If you buy in a company name, you will have to be personally liable.
If you buy in a trustee name, you will have to be personally liable.
End result is the same.

It's in my name, and I'm the guarantor.
It's nobodies responsibility but mine.
It relates to nobody else but me.

Should I write in a language other than english? Accountanese perhaps?

Non disclosure of a fact to the bank is not acting as a trustee as per law - as you put it.

And which law states this?

and more: http://www.behanlegal.com/KnowledgeCentre/Trusts/UnitFixedTrusts/tabid/292/Default.aspx

Other advantages of unit trusts include:

1 There is confidentiality about the trust’s financial affairs. There are no statutory disclosure requirements for trusts as for companies under ASIC requirements. There is no requirement for a trustee dealing with other persons to disclose that it is acting as a trustee of a trust and not in its own right. It is legal to open bank accounts, execute leases, and make investments for the benefit of the trust without others knowing the underlying structure;

As as previously posted, unless there has been a change in the law, it still applies.

 

[GeeJones]

Piston Broke.....

I agree.....

You are exactly right.... as long as you do not sign a document (a legal contract) in which you make a false claim or misrepresent a truth when asked. Which was my point all along.

No matter how many times you suggest it..... I can assure you that I am not an accountant.

Cheers

 

[redsquash]

Ok hope i can explain this clearly.......we have a development ................

........... to still buy on behalf of the Trust (only Hubby and I are the beneficiaries of this Trust) or something??..........
Can anyone suggest anything we can do apart from going with another Lender???

I dont want to side track the main issue BUT just want to check.

if you and your husband are the only beneficieries then either the trust will pay any taxes at 30% or you and your husband together would split the tax bill,( my guess at the same rate but with a tax free threshod of $6000 each.presuming you sell.)
Also yearly trust accounting fees are stupidly excessive even for dumplistic, affairs from my enquiries

 

[Piston Broke]

No matter how many times you suggest it..... I can assure you that I am not an accountant.Cheers

I'm sorry if I offended you by calling you one
My issue is basically that the banks want you to be personally liable and not try to palm it off (we def agree on that point). And that's exactly what you do as a trustee when you don't disclose (as the law allows) your acting as one. Your taking full personal responsibility and giving the bank full security.

Also yearly trust accounting fees are stupidly excessive even for dumplistic, affairs from my enquiries

I'd say that depends on who your speaking to.
Some accountants in big offices with nice views and fast cars and waterfront homes have high expenses that need paying.