How Safe?



From: Martin .

Looking at Trusts etc.. Is there a set method primarily for protection of I.P's when having Own Business?

Advice so far - is that Mr I.L.Sue can access a straight forward Trust by intimating to All Concerned, he Thought when he was dealing with Your Business, he was also dealing with Your Trust.

This leads to the set up whereby -
Only being a Director of the Company,
And the Company is Trustee of the Trust,
Mr I.L.Sue can no longer retain the focus on both you and the Trust at the same time.

Sound plausible?

If so then do I compromise the isolation by dealing with the Trust? i.e.; Lending money to it directly? Receiving as a Beneficiary?

This may be a cut and dried legal thing, but if any holes are there, please pick away!

And then...

In the area of the "All monies clause" that banks put on loans -
To make it so if something goes skew if, they can access all monies throughout any other loans or accounts with them -

Is the possibility of removing the clause within the realms of mortal man?

Any hint on softening the blow when mentioning to the bank that there's something that needs changing in their loan contract?

Does it's effect go across from trust to trust, or personal to trust also?

Does having a shiny new company also flush this manoeuvre down the proverbial?

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Reply: 1
From: Dale Gatherum-Goss

HI Martin

I guess this is really a question that you should discuss with your solicitor if you are concerned.

For most business people, who own investments, there a 2 entities.

The business through a company or a trust.
A trust which owns the investment assets.

I can honestly say that this structure is VERY common amongst the professions: Doctors, Lawyers, Accountants and Engineers.

As a business, your customers and creditors deal with the business itself and this should always be made clear on your invoicing, purchase orders, and letters.

The trust should have a separate trustee.

If you set it up right, from the beginning, you will never have a problem AKA Alan Bond and co.


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Reply: 2
From: Sim' Hampel

On 4/14/02 11:46:00 PM, Martin Lewis wrote:
>If so then do I compromise the
>isolation by dealing with the
>Trust? i.e.; Lending money to
>it directly? Receiving as a

Considering the trust is an independent entity, think of it like borrowing money from or investing money with a bank... if you get sued, it does not mean that the bank is liable for any investments/loans you have with them.

The advice I have been given is that being a beneficiary of a trust in no way makes you liable for the actions of the trustee.

Of course if you are both trustee and beneficiary, issues can arise, which is why we use a corporate trustee !

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Reply: 2.1
From: Martin .

Thanks Dale,
Thanks Sim',

Sounds clearer, would an single IP based LOC that is intended to be maxed out most of the time be ok not in the Trust?

(It's best to leave nothing available, but generally, its value for Mr I.L.Sue mightn't be there).

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Reply: 2.1.1
From: Dale Gatherum-Goss


If the LOC is maxed out, it won't make any difference. There is nothing to take.

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From: Gordon Austin

Interesting point - the use of high gearing for asset protection. I recently saw an asset protection strategy where a high income earner put positive cash flow assets in a family trust but also over time accumulated a number of highly geared properties in his own name to take advantage of negative gearing which happened to also provide asset protection. The family home was put in the wife's name for CGT reasons and some degree of asset protection also. Once the individual was retired and hence at less risk of being sued etc the highly geared assets were eventually sold or refinanced for major lifestyle purposes. The assets in the family trust however were to be kept permanently as an for ongoing income.

This was just something I stumbled upon on the Web. Any comments or opinions would be appreciated.

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From: Dale Gatherum-Goss

Hi Gordon

It's quite a common strategy and similar to what we do for ourselves.

I, of course, own nothing though despite controlling the assets that we buy

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Reply: 1.1
From: Michael G


You mention "different trustee", how different should this be?

i.e would having two seperate pty/ltd companies, one as the trustee for business and the other for investment trusts be sufficient? to further qualify, would it be sufficient, even if each pty/ltd had the same director?, or does the fact the same director runs both trusts, destroy the intention of creating a firewall?

Or is security only obtainable, by having seperate "human" guardians for each trust?

I hope that make sense?

Michael G

(yes I'm back with only 2000+ messages to pour through)
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Reply: 1.1.1
From: Simon H

Welcome back Michael G !!
with that many posts to get though i don't envy you, better hit the coffee (lots of late nights)

Simon H
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From: Dale Gatherum-Goss

Hi Michael!

How was the trip? Good I hope!

2 different companies is perfect, regardless of whether the directors are the same for each company.

Have fun

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