WA Bankruptcy - Set Up Trust for Son's Shares?

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4 March 2017
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Hi,

I need to declare bankruptcy. I do, however, hold shares in trust for my son. The shares were purchased using my son's money well before I purchased the property investment that has forced me into bankruptcy. The dividends have always gone into my son's bank account.

Myself and my ex-husband set the shares up in my name as we did not know a minor could have shares in the their own name, nor did we know about setting up a formal trust. If the trustee considers these shares mine and takes them to repay my debt, I will owe my son the value of the shares and the dividends my son would miss out on.

My question is, does a formal trust need to be set up for these shares to be considered as being held in trust and not mine?
 
S

Sophea

Guest
You would need some evidence of the trust arrangement. The easiest way to prove it is a written trust deed.
 

settle

Well-Known Member
4 February 2017
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What's the reason you are going bankrupt? How much debt are you in?
 
4 March 2017
2
0
1
You would need some evidence of the trust arrangement. The easiest way to prove it is a written trust deed.

What exactly is a trust deed? Is this also referred to as a "formal" trust arrangement?

As far as I was aware, it doesn't matter what I do with my son's shares from now on. The trustee of the bankruptcy looks back several years in past. If the trustee wanted to consider them as my asset, they could consider that I've "gifted" the shares to the trust... making them still accessible as an asset.

So basically my question is, is there any precedent for someone claiming bankruptcy who has proven shares not formally in a trust, were still in fact held in trust and therefore not considered their asset?
 

Rob Legat - SBPL

Lawyer
LawConnect (LawTap) Verified
16 February 2017
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Gold Coast, Queensland
lawtap.com
You should also look into whether your ownership of the shares in the register notes that you are holding them "not beneficially" or "beneficially". If it's the former, the records indicate that you are holding them on trust for someone else. The latter, then you aren't. Without some outward sign that you are holding them on trust, you might have a hard time trying to convince a bankruptcy trustee.​
 
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