Family home: Private vs Trust; Pros n Cons???

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Batman

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#116838 11-May-2013 17:25

I am completely unsure of putting your family home under private or trust? (I also want to ask about investment property re same question but might start a new thread for that but feel free to comment)

What are the pros and cons?

BuzzLightyear

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#815860 11-May-2013 18:12

Really depends what your circumstances are and what you are trying to achieve.

I put my home into a Trust a couple of years ago and have set things up so that all assets are spread equally amongst our children when we pass away. I have also removed myself as a trustee or director so essentially I do not own or control the property at all. My reasoning was that I have ownership of a business and want a level of protection against anything bad happening against my family home.

sxz

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#815903 11-May-2013 19:33

Pro:
1) You don't own the house.

Con:
2) You don't own the house.

Why this can be a pro:

The provisions of the Property (Relationships) Act wont (necessarily) apply to the house. Example: if you are in a relationship that then becomes a de facto relationship, your personal house will in most instances be presumed to be relationship property (i.e. 50/50). If the Trust owns it this wont happen, it will stay as Trust property.
If someone sues you and wins, court wont (necessarily) make you sell the house to pay that person, because it's not your house.
The Trust still exists after you die. This is good if your kids / wife / husband / dog can not take care of themselves or you are a control freak. You can leave instructions for the Trust to look after your kids / girlfriend / husband / dog once you die. They won't be able to sell the house (etc.) without Trustee consent. They can not (necessarily) challenge the Trust. If you owned the house in your own name, and left it to them by way of Will they can then do what they want with it, or better still, challenge your Will claiming your assets should have been distributed in a better way.

Why this can be a con (obviously):

Paperwork.
Tax.
Needing your other trustees to sign stuff.
cost (see paperwork, signing.)

There are also moral issues as to why Trusts aren't (morally..) good.

In each case it is very subjective. See your lawyer or accountant.

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#815913 11-May-2013 19:46

i dont own a business and am not old and kids aren't gonna marry anyone that will dump them (<5 yrs) and i don't want to pay thru my nose ...

so i'll put it in me and my wife's name ... thank you :D (my lawyer can't help me ... i don't understand what he's saying!)

what about investment property? what are benefits of trust vs private? (yes i do intend to pay tax either way)

sxz

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#815917 11-May-2013 19:52

Tax issues there - better talk to an accountant!

If your lawyer can't explain it in simple terms, get a better lawyer. There are lots of ins and outs to be aware of, so as above, its very subjective. There are some fantastic lawyers out there who can explain things far better than I can, in very simple terms.

scuwp

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#815925 11-May-2013 20:00

Go and get proper legal advice from a lawyer who deals in trusts. Individual circumstances will vary greatly as to if it will be of any benefit in the future. Many of the past benefits have since been removed with changes to legislation. If you don't understand your current lawyer then I suggest you find a new one.

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