Forming a trust

[Mystique]

Hello all. Hope someone can help. I would like to set up a trust for my children and transfer all my properties from my personal name to trust. Does anyone have any experience and knowledge how it works? Can anyone comment on pros cons of creating a trust? Can anyone suggest a lawyer for creating trust? Many thanks in anticipation of your response.

Hari

 

[Nir]

Hello Hari, Excellent question!

It reminds me of a related question I planned to ask here more than a year ago:

I heard in an event I went to like 2 years ago that an investor did the following:

He created a LAND TRUST behind the corporation that purchased properties. Then a FAMILY TRUST behind the land trust!

My question is: how do you do it technically and is it true that in this case you do NOT have to pay CAPITAL GAIN when selling!?

I am not a lawyer and have not done any of that, therefore I hope my question even makes sense.
(however, this is indeed a quotation from the presenter at that RE event from 2 years ago, who by the way came from the states).

Regards,
Neil

 

[Thomas Beyer]

QUOTE (Mystique @ Jul 28 2009, 12:30 AM) ... I would like to set up a trust for my children and transfer all my properties from my personal name to trust. Does anyone have any experience and knowledge how it works? Can anyone comment on pros cons of creating a trust?
you have to pay taxes when moving assets into a trust .. or opt for a tax free rollover .. thus: ask an experienced accountant first about tax implications, especially on assets that have enjoyed significant gains since you bought them.

I also understand a trust "expires" after 25 years. get more info on that. A corporation doesn`t have this disadvantage, thus a corporation with different share classes for various beneficiaries may be a better fit (class A voting shares for you, class B for wife, class C for kid 1, class D for kid 2, class E for beneficiary A .. etc. ... !

Ask yourself some questions:
a) Why do you wish to have a trust ?
b) What is the purpose ? Asset protection ? Inheritance planning ? Cleaning up a personal balance sheet with real estate and liabilities on it ?
c) what are the initial and ongoing costs ?
d) who is the trustee ?
e) what are the tax consequences on roll-in .. and on expiry ?
f) is this a once-in-a-lifetime event .. or an ongoing "shuffle assets in and out" process ?

 

[Mystique]

Thank you Thomas, thank you Neil. My primary purpose is to clean up my balance sheet and also, few things are ging on in my personal life. Thomas, your post have stimulated further thinking. I will return to this post sometime later. I don`t knwo if Barry M. or Navaz could comment on this issue. YOur responses are appreciated.