inherited property - possible to transfer into a trust?

[thydzik]

hello All

I have a question about inherited property, if the property is to be transferred in the names of x, y and z.

Is it possible to transfer the property into a trust with the trustees being x, y and z?

Thanks.

 

[benofbrisbane]

What does the will say?

 

[Terry_w]

Yes. But many issues and consequences and just because you can doesn't mean you should. Seek legal advice.

 

[thatbum]

hello All

I have a question about inherited property, if the property is to be transferred in the names of x, y and z.

Is it possible to transfer the property into a trust with the trustees being x, y and z?

Thanks.

Yeah why would you want to do this? What's the point?

 

[thydzik]

my thoughts are that it would be easier to distribute the rental income to beneficiaries?

easier to move the property around in the future?

 

[thydzik]

still unsure how moving the property into a discretionary trust works.

from what has been posted, it is possible.

the trust will be on the title, is it then possible to pay rental income to a single beneficiary? or does it need to be split between the trustees as per the will?

 

[Scott No Mates]

As Terryw said - get legal advice. If the person still hasn't passed, have them modify the will to create a testimentary trust so it passes directly into a trust (there is no requirement for the trust to exist prior to death of the person afaik).

 

[Terry_w]

still unsure how moving the property into a discretionary trust works.

from what has been posted, it is possible.

the trust will be on the title, is it then possible to pay rental income to a single beneficiary? or does it need to be split between the trustees as per the will?

The trust won't be on title as it is not a legal entity, the trustee will hold the assets and be on title. Depending on the situation this may involve a transfer or a declaration of trust. stamp duty and/or CGT may or may not apply.

Once the property is owned by the trustee the income from the property can be distributed in accordance with the terms under the trust deed. If the trust is a discretionary trust then the trustee could probably distribute to one beneficiary.

 

[thydzik]

thanks, that makes sense.

what is persons x, y and z are trusted non-equal parts of the property in the will.

Can a discretionary trust still be used?

 

[coastymike]

Look into capital vested trusts. It is a complex area. Highly complex in fact and something not for general forum discussion as there are too many issues involved.

 

[Terry_w]

thanks, that makes sense.

what is persons x, y and z are trusted non-equal parts of the property in the will.

Can a discretionary trust still be used?

Yes, but it doesn't mean a discretionary trust should be used. Many issues.

 

[Paul@PFI]

A cgt event would be my concern. Dutiable and cgt in Some states

 

[thydzik]

A cgt event would be my concern. Dutiable and cgt in Some states

Wouldn't a CGT event occur no matter who the property is transferred to, individual or trust?

 

[Paul@PFI]

Yes. In many cases not all. That is the concern

 

[datto]

There are special rules that apply to the disposal of an inherited property. It may be exempt from CGT depending on such things as when the property was originally purchased, how long after inheriting it was disposed etc. Check ATO web site for specific examples