For his 'service' ?
Trusts to protect real estate in case of divorce
- Thread starter TEG
- Start date
For his 'service' ?
My wife is 55 and I am 63 and we sold 5 fully owned investment properties (4 houses and a retail shop) about 3 years ago so hopefully bankruptcy is not on the horizonAlthough we did not directly "loan" my son more than approx $50,000 a further $100,000 or so was an inheritance that we flicked direct to him rather than claiming our two thirds share. We also have a complicated trust established to protect our substantial super fund and family home from being accessed by any partner of our son's after we die . (although we are trying to avoid dropping off this mortal coil anytime soon
There was no direct record made when the loan agreement was drawn up as to how my son's home was funded however I would obviously strongly advise anyone contemplating the process I have outlined to get expert advice from their lawyer and accountant.
Steve
...did you get expert advice from a lawyer on the "loan" agreement? And also the complex trust established to protect your assets from being accessed by your son's partner?
Because I'd be very surprised if either of them work as advertised. The former sounds like you falsified some documents to make it look like there was a loan, and the latter has the issue of the Family Court generally being able to penetrate any domestic trust structure.
That sound like us. Wife & I are 50/50 partnership - I make it & she spends it!
Wow my first ever series of posts here and I have to defend myself against a suggestion I may have falsified documents. I am not actually offended by this as I fully understand that getting these processes correct is vital for all of us ..Anytime someone comes on here and comes up with an apparently "creative" solution to get around a possible legal difficulty the statements made obviously deserve scrutiny and should be challenged if the information appears misleading or illegal. I don't really wish to give my life story and disclose my full financial background however I did omit to disclose that a portion of my son's "other resources" used to fund his home purchase included proceeds from the sale of a previous property he resided in that was owned by my wife and I. The premise of the "loan" agreement was that total funds advanced to my son by us over 4 or 5 years exceeded the $200,000 figure deemed to be owing .I have no way of knowing if this legal document will prevail in the scenario I detailed before (disaffected partner trying to make a claim on the property) however I can certainly tell you that the entire exercise was undertaken in good faith, with the best of intentions and at the suggestion of people with (hopefully) expertise .The document is sitting in a lawyers safe and will only ever see fhe light of day if any long term relationship my son is in goes belly up.
Similarly the trust deed to protect our assets was drawn up by a legal team with appropriate expertise and we paid them well Hopefully they got it right. I note there are some exceedingly well qualified people on this forum and to be quite honest I am probably getting out of my depth in this discussion however if someone wishes to find further flaws in what I have just written I will attempt to respond.Steve
Hi Peter. Nice advice.
From reading everyone´s posts, it looks like there is no way to 100% protect your assets in divorce.
I guess everyone really does need to ask these questions before marriage, and has to be willing to part with half the assets if the relationship breaks down.
Wow my first ever series of posts here and I have to defend myself against a suggestion I may have falsified documents. I am not actually offended by this as I fully understand that getting these processes correct is vital for all of us ..Anytime someone comes on here and comes up with an apparently "creative" solution to get around a possible legal difficulty the statements made obviously deserve scrutiny and should be challenged if the information appears misleading or illegal. I don't really wish to give my life story and disclose my full financial background however I did omit to disclose that a portion of my son's "other resources" used to fund his home purchase included proceeds from the sale of a previous property he resided in that was owned by my wife and I. The premise of the "loan" agreement was that total funds advanced to my son by us over 4 or 5 years exceeded the $200,000 figure deemed to be owing .I have no way of knowing if this legal document will prevail in the scenario I detailed before (disaffected partner trying to make a claim on the property) however I can certainly tell you that the entire exercise was undertaken in good faith, with the best of intentions and at the suggestion of people with (hopefully) expertise .The document is sitting in a lawyers safe and will only ever see fhe light of day if any long term relationship my son is in goes belly up.
Steve
Hi Steve,
What you have done is a good idea and can be effective - to a certain extent. But there are a lot of cases where divorces have ocurred and claims made by one party that certain monies were actually monies borrowed from parents many years ago. Sometimes they were borrowed, sometimes some try to make things up to assist their situations. Usually money was just moved and little consideration was given to whether it was a loan or a gift - and just because the loan agreement was not written doesn't mean it was not a loan!
But at least you have a loan agreement.
Bankruptcy may be unlikely, but death is a certainty. If you die with a loan outstanding to your son, the executor or administrator of your estate must force your son to repay this loan - this could be a good thing as the money can come back into your estate and from there be passed to a testamentary discretionary trust with your son as a beneficiary - the trustee of the trust could lend the money back to your son perhaps... Once it is in the trust it would be even safer from any gold digging spouses.
Just hope you had considered this for 2 reasons
1. I have seen a case where this happened - the son was sued by the estate.
2. Many people put in place good asset protection plans only to forget the death side of things which then unravels everything
Easy - marry someone who has more (or same) as you or don't marry at all.
Personally I have found that every guy in my age bracket (30s) earns a lot less than the females I know and own less properties (sometimes none, which I find surprising). Times are changing!! Women are in the workforce and actually do have money saved and investments LOL..
You may find that you will naturally be attracted to someone that has the same financial strategy and wealth as you and so loss of assets won't be an issue. These girls are also looking for guys that have some security and ambition so win win!
I find it extreme that you are thinking of selling off everything to pay CGT on the fear of divorcing someone that you haven't met/married yet. Hold onto your IPs and speak to a lawyer for proper advice before making any rash decisions
Personally I have found that every guy in my age bracket (30s) earns a lot less than the females I know and own less properties (sometimes none, which I find surprising). Times are changing!! Women are in the workforce and actually do have money saved and investments LOL..
You may find that you will naturally be attracted to someone that has the same financial strategy and wealth as you and so loss of assets won't be an issue. These girls are also looking for guys that have some security and ambition so win win!
I find it extreme that you are thinking of selling off everything to pay CGT on the fear of divorcing someone that you haven't met/married yet. Hold onto your IPs and speak to a lawyer for proper advice before making any rash decisions
Last edited:
Thanks Terry for your advice . I hope we have most bases covered however based on the valuable feedback here I will revisit this matter when I next meet with my lawyers
Steve
I find it strange that you are worrying/stressing about a situation that may/may not happen for god knows how long.
You currently don't have a partner who you are considering marrying so to me it seems like a lot of worry and sleepless nights for no purpose because by the time you are ready to marry/become defacto the rules could have changed and none of this would apply.
Like others have said - focus on finding someone with similar values, morals and goals to you. That will certainly help in future relationships because you will be on similar pages about some issues.
The other thing is -- if you are considering getting married there is generally a large element of trust. You need to be able to trust this person and go into the relationship with the idea that 'this is going to work'. Sure, plan for the worst (when the time comes) but don't worry when you don't need to. All the time spent worrying could be time better spent.
That's my 2c anyway
You currently don't have a partner who you are considering marrying so to me it seems like a lot of worry and sleepless nights for no purpose because by the time you are ready to marry/become defacto the rules could have changed and none of this would apply.
Like others have said - focus on finding someone with similar values, morals and goals to you. That will certainly help in future relationships because you will be on similar pages about some issues.
The other thing is -- if you are considering getting married there is generally a large element of trust. You need to be able to trust this person and go into the relationship with the idea that 'this is going to work'. Sure, plan for the worst (when the time comes) but don't worry when you don't need to. All the time spent worrying could be time better spent.
That's my 2c anyway
I was in the exact same position, but I'm a woman in Sydney. 5 years later I'm now married with 2 kids under 3. I still have all my properties but will eventually roll everything into one huge PPR...IF we stay married...even if we don;t we may do a massive PPR duplex.
I know the courts can award anything to my husband - nothing is safe.
But I am calm and not concerned as A) I married a good guy; B) divorce has been discussed and if it were to happen, and it probably will in 5 or so years, we would be courteous and not go through court, as the vast majority of divorces. Most divorces are either mediated or not - only the really bad cases hit court.
Why would he or I waste money on lawyers, we both hate lawyers. And we like each other, even if we divorce we'll still like each other.
We're now in an open marriage. We're not nasty people. If he actually did decide to become nasty and took all my properties via court..well, I would be happy I had been married and thrilled with my kids - they are worth more than a million IPs! It's worth it so don't worry.
I know the courts can award anything to my husband - nothing is safe.
But I am calm and not concerned as A) I married a good guy; B) divorce has been discussed and if it were to happen, and it probably will in 5 or so years, we would be courteous and not go through court, as the vast majority of divorces. Most divorces are either mediated or not - only the really bad cases hit court.
Why would he or I waste money on lawyers, we both hate lawyers. And we like each other, even if we divorce we'll still like each other.
We're now in an open marriage. We're not nasty people. If he actually did decide to become nasty and took all my properties via court..well, I would be happy I had been married and thrilled with my kids - they are worth more than a million IPs! It's worth it so don't worry.
Last edited:
This is easier said than done once you get older.
If you marry in your late teens up to the late 20s / early 30s, I suspect that you can find partners of similar net worth status.
Once you hit late 30s, its gets exceedingly difficult. Lets say the person, and I deliberately remain gender neutral, has never been married / been devoted to their work and life and has accumulated 3-4 mil by the age of 37, it would be against the odds to find someone of similar status. Generally, after the mid 30s, single people have already been through divorce, separation, some with dependent kids.
Then this 37 year old would be thinking - how on earth do I protect my assets in the eventuality of getting married and getting married has suddenly become a very important priority.
So my take home from this is that it is best to get married early.
Steve
if your son isnt making any repayments.and merely capitalising interest wouldnt the family.courts deem this to be a non commercial arrangement and then the wife argues it was merely a gift wrapped up to look like a loan.
if your son isnt making any repayments.and merely capitalising interest wouldnt the family.courts deem this to be a non commercial arrangement and then the wife argues it was merely a gift wrapped up to look like a loan.
Any person who goes in to a marriage thinking about how to best strategise it or what they can get from their other half is probably not worth marrying, and probably won't be very successful in life either.
A person who spends their time thinking about these things, rather than focussing on how to make big money, will never make big money.
In this thread, the problem is how to protect assets once you have already made big money from successful ventures but have not yet married.
My opinion is that it is best to get married before making big money, then the partnership can be on a much more secure footing without concerns about asset loss to a partnership developed after big money.
This is a minefield.
I'm loath to bring this up, but here goes...
There have been many, many posts in the past (by some men on this forum) saying that even after a long marriage the wife is not entitled to half as she has not worked the whole time... like giving up a career (or even a regular job) to raise children, giving up the pay involved in order to be home with children, has no worth and therefore the stay at home wife has not "contributed" enough to warrant what she may get.
It's like contributing financially is the only worthwhile contribution towards building up assets and a functioning family.
I know this will open a hornet nest of comments, but as a stay at home wife, I don't agree with this. I never worked so hard as when I stopped "work".
So, even if you go into a marriage with equal net worth when young (ie. not much), many men think staying at home, giving up any salary, and thus not "contributing" means a wife is not entitled to half of what is made in that marriage, should it end in divorce.
Perhaps I would feel differently if I was a man, but I know for sure that when we had little children and my husband had them for just ONE day, he used to tell me he admired how I did it, and he would NEVER want to do it day after day after day after day....
Some men think stay at home mothers sip lattes all day and chat with the other mummies at the local cafe. That might be a small portion of a very long, lonely week, but it isn't the "norm".
He reckoned being a full time worker was easy street compared to being a mum. But for many men it is not valued, certainly not once the kids are older and there might be a marriage breakup... all the sacrifices a stay at home mother has made all seem to be forgotten and all that is remembered is "the wife hasn't contributed financially for X number of years, therefore she is a grasping ***** if she wants half of what "I" have contributed to our assets.
I'll just pop off and get my tin hat...
I'm loath to bring this up, but here goes...
There have been many, many posts in the past (by some men on this forum) saying that even after a long marriage the wife is not entitled to half as she has not worked the whole time... like giving up a career (or even a regular job) to raise children, giving up the pay involved in order to be home with children, has no worth and therefore the stay at home wife has not "contributed" enough to warrant what she may get.
It's like contributing financially is the only worthwhile contribution towards building up assets and a functioning family.
I know this will open a hornet nest of comments, but as a stay at home wife, I don't agree with this. I never worked so hard as when I stopped "work"
.So, even if you go into a marriage with equal net worth when young (ie. not much), many men think staying at home, giving up any salary, and thus not "contributing" means a wife is not entitled to half of what is made in that marriage, should it end in divorce.
Perhaps I would feel differently if I was a man, but I know for sure that when we had little children and my husband had them for just ONE day, he used to tell me he admired how I did it, and he would NEVER want to do it day after day after day after day....
Some men think stay at home mothers sip lattes all day and chat with the other mummies at the local cafe. That might be a small portion of a very long, lonely week, but it isn't the "norm".
He reckoned being a full time worker was easy street compared to being a mum. But for many men it is not valued, certainly not once the kids are older and there might be a marriage breakup... all the sacrifices a stay at home mother has made all seem to be forgotten and all that is remembered is "the wife hasn't contributed financially for X number of years, therefore she is a grasping ***** if she wants half of what "I" have contributed to our assets.
I'll just pop off and get my tin hat...
I know this will open a hornet nest of comments, but as a stay at home wife, I don't agree with this. I never worked so hard as when I stopped "work"
Fortunately, the empirical research, family law legislation and decisions all share your point of view as well.
I'd be curious to know if you share my view, ie. if your wife gave up her job to care for your children, would you begrudge her getting an equal share in the event of a split. Let's assume this is when the youngest is old enough to be able to go to after school care, and the wife may be lucky enough to pick up a two day a week (or more) casual position after having been out of the workforce for maybe ten years.
I'm not being "rabid" about this, but just curious. I watched a show (repeat - probably five years old) this morning with the "gorgeous" George (?) who does the Build a New Life shows. This chap bought a 700,000 Pound house and was planning on spending $250,000 Pounds on a reno. (Haven't finished watching but I'm sure he will end up spending minimum $1M Pounds in total). During the planning he met a new girlfriend.
I'm a woman, and I said to hubby "I would be taking out a pre-nup if I was him". If the relationship lasted, say, two years, and no children came of it (meaning the girlfriend/wife has not given up perhaps a lucrative career) then I would hate to see that man lose maybe half the house in the event the relationship ended.
I'm not pro-man or pro-woman in this stance, but pro-FAIR.
