Hi all,
I was hoping you could help me clarify something.
I am new to the game. I have purchased on IP using a hybrid trust controlled by a company trustee. I have two daughters and wife who are beneficiaries. My wife and I are directors of the trustee company.
My daughters have worked hard and saved enough cash for a descent deposit and wish to purchase their first property in joint venture.
I have been told if they use the hybrid trust via purchasing units the company trustee directors will be implicated as guarantors and as a result their borrowing power reduced.
The intent of setting up the trust in the first place - other than being advised it is wise to do so - is to protect the assets which it holds. However, financing options are proving to be very limited and not competitive.
Should my daughters buy their first IP outside of the trust in JV with better financing options or buy units in the trust and reduce the borrowing power of the trustee directors?
Sorry for the rambling. Thinking out allowed a little. It feels like a catch 22 Any clarity is appreciated.
I was hoping you could help me clarify something.
I am new to the game. I have purchased on IP using a hybrid trust controlled by a company trustee. I have two daughters and wife who are beneficiaries. My wife and I are directors of the trustee company.
My daughters have worked hard and saved enough cash for a descent deposit and wish to purchase their first property in joint venture.
I have been told if they use the hybrid trust via purchasing units the company trustee directors will be implicated as guarantors and as a result their borrowing power reduced.
The intent of setting up the trust in the first place - other than being advised it is wise to do so - is to protect the assets which it holds. However, financing options are proving to be very limited and not competitive.
Should my daughters buy their first IP outside of the trust in JV with better financing options or buy units in the trust and reduce the borrowing power of the trustee directors?
Sorry for the rambling. Thinking out allowed a little. It feels like a catch 22 Any clarity is appreciated.