Is my HDT Invalid

[Ralph]

Have been reading the thread on Settling Trusts and has me a little concerned on how ours is setup - specifically the trail of the $10 settlement sum......I had this at the end of that thread, but alot of posts so I've bumped it here...

We setup a HDT recently with a Corp. Trustee. My wife, myself and son as primary beneficiaries.

Our neighbour acted as Settlor. He gave my wife $10 cash as the settled sum. She then electronically transferred $10 from her bank account into the Trust Account.

There is no record that she deposited the $10 to her own bank account before the electronic transfer to the Trust account - so no hard trail of the cash.

Our accountant advised in a letter once the Trust was setup that we should proceed to deposit the settled sum into the Trust account, but in my inexperience I was not aware of the significance of the legal trail.

Does the above make our Trust invalid - we already have two houses in there making disolving very painful if we have to create a new one....

Appreciate your views................

 

[Hellman]

Usually you just staple a $10 note to the trust documents.

Hellman

 

[Ralph]

Thanks Hellman,

Problem is we didn't do this initially, and it may be too late now. We have a bank statement that records the first transaction as $10 going into our trust bank account - from my wifes savings account (no other identification).

Perhaps we can argue that that $10 was just her buying some units in the Trust (i.e. say it has NOTHING to do with money from the Settlor), and separately staple $10 to the Trust itself, identifying that as the original $10 note given to her by the Settlor. But I'm sure doing it that way, and already having $10 as the first entry into the Trust account would make things risky in the event we were taken to court and the Trust were challenged

Grateful for any thoughts

Cheers,

Ralph

 

[redwing]

Trust

Whoever set up the trust should be able to advise you shouldn't they?

REDWING

 

[Ralph]

Yes, their view is that there is not conclusive proof as to the trail of the $10, (which I agree) but inconclusive as to what this may mean if the Trust were ever challenged.


Cheers,

Ralph

 

[TryHard]

$10

I might be over-simplifying, but if you stapled $10 (of the same vintage as the Trust) to the deed, couldn't the $10 in the bank simply be an accidentally gifted amount or some other obscure payment ? ie. you still have the $10 your neighbour gave you, its stapled to the Deed. I mean, surely in all its wisdom, the Gumby-ment would not suggest a trust is invalid because someone paid a small amount into it that can't be explained ?

If I may be so bold, I hit a similar snag with my Trust - and NickM sorted the issue out. I believe its ok to post his details - so you can contact him via www.strategicwealth.com.au if you're interested. With 2 properties in the Trust if I was you I'd be seeking and funding professional help, rather than relying on forum opinions and what we all might think is common sense, which apparently seldom comes into play in trusts and legal issues

 

[Ralph]

Cheers TryHard,

That's an excellent suggestion. I suspect it was an accidentally gifted amount, and after querying my wife, she hasn't used the $10. I'll seek professional advice nonetheless.

Regards,

Ralph

 

[Terry_w]

A trust must have property to exist and the settled sum is the initial property of the trust upon establishment. There is no need to deposit the settled sum in a bank. the requirment is that the trustee be holding property - and another requirement that the trust property be held separate to the trustee's other property. So the settled sum could be kept with the deed or in a folder with the trust deed, or in a draw, or deposited in a bank.

 

[redwing]

A trust must have property to exist and the settled sum is the initial property of the trust upon establishment. There is no need to deposit the settled sum in a bank. the requirment is that the trustee be holding property - and another requirement that the trust property be held separate to the trustee's other property. So the settled sum could be kept with the deed or in a folder with the trust deed, or in a draw, or deposited in a bank.

If deposited in a bank, how long until your $10 disappears through fees

 

[Terry_w]

If deposited in a bank, how long until your $10 disappears through fees

The settled sum is only the initial property of the trust. It would be added to in most cases, and the trustee may be holding some of that property in the form of cash.

 

[Scott No Mates]

If deposited in a bank, how long until your $10 disappears through fees

ut depends upon who's looking after the trust.