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Trustees of a Trust - Liability to be Sued?

Discussion in 'Commercial Law Forum' started by RoyG, 18 February 2015.

  1. RoyG

    RoyG Member

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    My wife and I are company directors and shareholders of a pty ltd company.

    Is it a good or bad idea for the company to become trustee of a trust ?
    If my wife or I were to be sued, can someone claim our shares in the company, thus becoming the trustees as the new owners of the company ?

    Or would it be just as good as being trustees in our own right, not using the company ?

    The trust's assets are mortgage over properties that we own and the trust has given loans to us personally.

    RoyG
     
  2. Tim W

    Tim W Lawyer

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    Trusts certainly have their uses,
    but are not always the universal magic bullet tax shelter that people think.

    Why do you think you need one?
     
  3. RoyG

    RoyG Member

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    Hi Tim,
    We are not looking for a tax shelter , but asset protection.
    WE have unencumbered properties in personal names and to transfer into a trust would be to costly with CGT and SD. Therefore we propose to encumber the asetts by mortgage.
    RoyG
     
  4. Tim W

    Tim W Lawyer

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    That thing where you gift the asset(s) into the corpus,
    then get a loan back from the trust, secured by (a) second mortgage(s)?

    Sorry, but to me, that structure is little more than
    a conspiracy to conceal assets from creditors.
    Someone else may be willing to help you,
    but I am not.
     
  5. RoyG

    RoyG Member

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    Hi Tim,
    There is NO conspiracy to CONCEAL anything. The assets remain visable in the original name(s). All I am doing is to encumber the assets.
    You have some weird ideas of concealment or conspiracy to conceal things from creditors , of which there are none at present and none on the horizion. It is merely a form of insurance from possible future litigation. You have got hold of the wrong end of the stick mate.
    .
     

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