Private trust for asset protection
A private trust is a trust deed that is not registered with the government, although it can be registered and remain private. The trick is in the accounting skills you learn along the way. A trust is a private law, usually for a family, it is the law about protecting the assets of the family from all external parties. At trust is a security instrument, but as with any document or instrument, it is only as good as your knowledge of the document and what it means.
A private trust can protect assets for the beneficiaries, and the beneficiaries can be specifically reduced to blood relatives only, meaning that if there is a divorce in the family, a divorcee will not lose the assets if they are the trust. There are always exceptions and other factors to consider, so do your research.
Trusts will likely be challenged at some point in time by a disgruntled beneficiary or other person, and lawyers will make every attempt to break into the trust to take their share of trust assets, so researching rules and trust law will be very beneficial to you when or if you find yourself in this predicament. Lawyers and accountants set up trusts with the intention that later on someone might challenge and there they have a repeat client and repeat $$$$.
Our trusts help keep unwanted entities away from any authority over the trust. This does not mean it cannot be penetrated by a crafty little devil, and protecting it from their hands depends on the trust deed AND the knowledge of the trustee or principal, so do your research and take time to discover what a trust truly is. Any document you have for your protection is only as good as your level of knowledge. They are basically useless if you don’t learn the skills you need to get the job done the way you need it. If you rely on another (accountant, solicitor, court, etc) you will be giving them the power (attorney) to make the decisions for you and those decisions may not be in your best interests or using the full potential of the trustee powers.
Some states require that a trust be stamped, means to pay stamp duty, this is not a registration. NSW has a fee of $500 and Qld has zero stamping fees. You must research your state to find out if you need it stamped at all. Usually a trust is required to be stamped when it is holding dutiable assets, meaning property (car, house, etc). We prefer our trusts to remain private and they are created by $100 deposit and therefore do not require stamping. Sometimes it is a very wise to have the deed stamped for any future potential issues. Grantor’s (settlor) have a right of re-entry into the trust, so choosing your solicitor or accountant might not be a wise move as many have since discovered.
If your intention is to place assets in a trust, you must check the rules for your state. There will be the usual stamp duty fee payable to transfer in the trust, but this might not apply in some states if the asset is a family asset moving to a family trust, so do your research.
You must also consider that when the trust vests (ends) and the assets are distributed, that the trust or the beneficiaries may be liable for capital gains tax on the house or other assets. Some states have a rebate on the CGT if the trust is a family only trust.
Solicitors usually give the first hour free when booking appointments, they do this because they want to wow you with their knowledge. You might want to consider visiting a few to ask about trusts and lead them on (as they do us) to ask as many questions as you can about a trust so you are prepared to set one up yourself, using this site or another private trust provider. Do not let the solicitor know your intentions to go elsewhere or they will then provide information with the intention of placing fear into the client. The only thing to support fear is lack of knowledge and the solicitor!
Some people need a registered entity for business but the trust most not be registered, another entity is often the trustee or separate and running alongside the trust.
A family trust holding property assets a man or woman can be the trustee, but many also have company as trustee, this keeps prying eyes one step further from the trust and you and this is a simple matter to change a trustee at any time however the corporate option also binds to the Corporations Act. There are pros and cons for both options and really depends on what best fits your needs.
Learning to operate in the private side of life, while learning to carefully navigate the public world is a journey and there is much information and discussion about this here in the private members forum.
You are encouraged to watch our videos before making your application
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