Unit/Hybrid Trust

If an individual is not in a high risk occupation & doesn't have any real estate in their personal name, I'm coming to the conclusion that it would be very unlikely to be sued for whatever reason.

1. Do you think that it's a good idea for them personally to be a unit holder of a Unit Trust or Hybrid Trust that holds real estate?

2. If something happens on that property that's held in that trust, can the unit holder be sued, or it's just the trustee?

3. If a Hybrid Trust owns shares or property & sells them later on and makes a capital gain, would the capital gain be passed onto the "Income" unit holder or it has the flexibility to pass it onto anyone else? In another words how would this be treated?
 
If an individual is not in a high risk occupation & doesn't have any real estate in their personal name, I'm coming to the conclusion that it would be very unlikely to be sued for whatever reason.

You are coming to the WRONG conclusion. ;) Here's a couple of examples:
1. Do you have the occassional drink and then also drive a car - not quite sure of you are just under/over the legal limit? What if you hit someone or worse still injured or killed them?
2. Ever moved address and thought you changed it everywhere (but didn't)? Policy on the motor vehicle lapsed by a few days? Hope you don't have an accident that's your fault.
3. You might be in a low risk occupation now, but people change jobs and occupations frequently. What if you ended up in a high risk occupation in 10-20 yrs and everything is in your personal name?

I could go on................:eek:
 
I see where you're coming from, you make valid points. From a tax point of view (land tax & borrowings) it would be better, but I guess later on you could transfer the units to a discretionary trust for asset protection.

2. If something happens on that property that's held in that trust, can the unit holder be sued, or it's just the trustee?

3. If a Hybrid Trust owns shares or property & sells them later on and makes a capital gain, would the capital gain be passed onto the "Income" unit holder or it has the flexibility to pass it onto anyone else? In another words how would this be treated?

Anyone able to give their opinions on the above 2 points too?
 
You are coming to the WRONG conclusion. ;) Here's a couple of examples:
1. Do you have the occassional drink and then also drive a car - not quite sure of you are just under/over the legal limit? What if you hit someone or worse still injured or killed them?
2. Ever moved address and thought you changed it everywhere (but didn't)? Policy on the motor vehicle lapsed by a few days? Hope you don't have an accident that's your fault.
3. You might be in a low risk occupation now, but people change jobs and occupations frequently. What if you ended up in a high risk occupation in 10-20 yrs and everything is in your personal name?

I could go on................:eek:

With respect I would say that's typical scare tactics from lawyers/accountants. People tend to obsess over never ever getting sued for assets but by the time it ever gets to that they end up handing all their assets to their lawyer/accountant anyway to set up the structure. For the vast majority of people trusts are not that necessary. If you are in business, then sure. But as a PAYG it is limited.
 
I see where you're coming from, you make valid points. From a tax point of view (land tax & borrowings) it would be better, but I guess later on you could transfer the units to a discretionary trust for asset protection.



Anyone able to give their opinions on the above 2 points too?

Impossible to give an answer with reading the trust deed.

If you transfer the units you have to consider the clawback provisions of the Bankruptcy act too.
 
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