1) For the DT to provide asset protection, you want the appointor to be an unrelated party. Ours is our accountant.
2) If the Trust deed lists plenty of other potential beneficiaries - such as your relatives and future offspring, related companies and Trusts, etc - then you're not the sole beneficiary. Of course you may choose, as Trustee, never to distribute to any of those other beneficiaries, but it does provide an additional separation between yourself and the Trust.
3) I'd be very wary of people who minimise the legal risks. Driving/owning a motor vehicle, and owning property, are two of the most litigious activities in existence. If you also operate a business, you'd be mad (IMHO) to not protect substantial assets with structures. Insurance and debt protection are essential, but as the equity in the property builds over time, it wouldn't be adequate for me to sleep well. The whole "keep your property safe" and "don't be negligent" is all very well, but there are plenty of things that can happen inadvertently that leave you exposed. Some examples:
a. You let a friend or relative borrow your car. They drive drunk and/or without a licence. If they have an accident and you have more assets than them, you're exposed.
b. You get some electrical work done by phoning an electrician in the local rag. He performs some work on your IP. He screws up and somebody's electrocuted. Turns out the electrician's licence had expired a few weeks before he did the work on your place. Guess who's exposed?
c. You're in a car accident, where you're deemed to be at fault. (Of course you're a careful driver, but hey, accidents happen - that's why they're called "accidents" ) Turns out the direct debit on your insurance bounced last fortnight because - I dunno - some oversight... and the insurer uses this to deny coverage. Or your registration expired and they'd sent the renewal to your old address and you'd overlooked it, and thus your insurer denies your claim because you were driving an unregistered vehicle. Or your drivers' licence has expired because you forgot to renew it... and so on ad infinitum.
d. You buy a beautiful IP on the top of a hill with a swimming pool. The swimming pool wasn't constructed and underpinned properly, and one night it cracks and sends a torrent of water down the hill into the neighbour's home. It turns out the swimming pool was put in negligently by an unlicenced contractor by the previous owner, who did it "on the cheap", and the swimming pool's illegal. Your insurer doesn't cover illegal swimming pools. Guess whose assets are exposed again?
I know - or know of - people who've been in all of these situations (or substantially the same). Even if you ultimately aren't found to be liable, you're highly likely to end up in court trying to argue your case. I'd rather have the litigant's solicitor look up my name and find out that I own nothing, and save the hassle.
Then there are also the benefits associated with transferring property after death. I think the "complications" and "expenses" of maintaining a discretionary trust are way overstated by the critics. It costs us about $1500 a year to maintain a discretionary trust and corporate trustee, and I consider that worthwhile. If you don't worry about the risk of being sued, then I guess, don't!
2) If the Trust deed lists plenty of other potential beneficiaries - such as your relatives and future offspring, related companies and Trusts, etc - then you're not the sole beneficiary. Of course you may choose, as Trustee, never to distribute to any of those other beneficiaries, but it does provide an additional separation between yourself and the Trust.
3) I'd be very wary of people who minimise the legal risks. Driving/owning a motor vehicle, and owning property, are two of the most litigious activities in existence. If you also operate a business, you'd be mad (IMHO) to not protect substantial assets with structures. Insurance and debt protection are essential, but as the equity in the property builds over time, it wouldn't be adequate for me to sleep well. The whole "keep your property safe" and "don't be negligent" is all very well, but there are plenty of things that can happen inadvertently that leave you exposed. Some examples:
a. You let a friend or relative borrow your car. They drive drunk and/or without a licence. If they have an accident and you have more assets than them, you're exposed.
b. You get some electrical work done by phoning an electrician in the local rag. He performs some work on your IP. He screws up and somebody's electrocuted. Turns out the electrician's licence had expired a few weeks before he did the work on your place. Guess who's exposed?
c. You're in a car accident, where you're deemed to be at fault. (Of course you're a careful driver, but hey, accidents happen - that's why they're called "accidents" ) Turns out the direct debit on your insurance bounced last fortnight because - I dunno - some oversight... and the insurer uses this to deny coverage. Or your registration expired and they'd sent the renewal to your old address and you'd overlooked it, and thus your insurer denies your claim because you were driving an unregistered vehicle. Or your drivers' licence has expired because you forgot to renew it... and so on ad infinitum.
d. You buy a beautiful IP on the top of a hill with a swimming pool. The swimming pool wasn't constructed and underpinned properly, and one night it cracks and sends a torrent of water down the hill into the neighbour's home. It turns out the swimming pool was put in negligently by an unlicenced contractor by the previous owner, who did it "on the cheap", and the swimming pool's illegal. Your insurer doesn't cover illegal swimming pools. Guess whose assets are exposed again?
I know - or know of - people who've been in all of these situations (or substantially the same). Even if you ultimately aren't found to be liable, you're highly likely to end up in court trying to argue your case. I'd rather have the litigant's solicitor look up my name and find out that I own nothing, and save the hassle.
Then there are also the benefits associated with transferring property after death. I think the "complications" and "expenses" of maintaining a discretionary trust are way overstated by the critics. It costs us about $1500 a year to maintain a discretionary trust and corporate trustee, and I consider that worthwhile. If you don't worry about the risk of being sued, then I guess, don't!