Hybrid discretionary trust & chris Batten

[bubbleroo]

Hi All,

I had a look at the sample of a hdt at www.macquariegs.com.au and i had also subscribed to chris batten website & watched his video on hybrid discretionary trust (HDT) setup.

What i am confused about (and hope you could clarify) is that people on the forum mentioned that the sample at macquarie & chris's HDT are the same thing but is it ?

From the video, chris explained that it's a discretionary trust owning units in the UNIT trust. Discretionary trust being the only unitholder of the Unit trust. So really there are 2 trusts set up. Very separate from what i can grasp.

Now looking at the sample HDT at macquarie site, it's a Discretionary trust with a 'clause' that allow for issuing of Special Units.

thanks

 

[ATB]

bubbleroo,

I grappled with the same issue over recent weeks.

Can't confirm whether the HDT on the Chrisbatten and MGS sites are identical, since haven't viewed them side by side. However, I expect they would be.

My understanding now is as follows:

a) A HDT just is a discretionary trust with an added capacity to issue income units in the manner of a unit trust. In this sense, a HDT combines within a *single* trust aspects of a discretionary trust and a unit trust.

b) In some of his videos and papers, Chris Batten advises establishing a *double* trust structure, involving a Discretionary Trust or a HDT (which he prefers) plus a separate Unit Trust, and where the sole unitholder is the Discretionary Trust or HDT. This apparently is for added asset protection reasons and for a capacity to transfer assets into a SMSF. However, it is a more elaborate, and costly, structure than a HDT by itself, and may not suit or be needed by many investors.

Hope this is right, and therefore of some help.

--ATB