AI - Increased use. Is it any good

I wanted to test AI and Copilot

I asked the simple question. ""Explain the merits and issues with a trust wning property in NSW Australia??""

Certainly! Owning property through a trust in New South Wales (NSW), Australia, has both merits and concerns. Let’s explore them:

Merits of Owning Property in a Trust:

1. Asset Protection: Trusts provide a layer of protection for your assets. By holding property in a trust, you can shield it from personal liabilities, legal claims, and creditors. This is especially beneficial for high-net-worth individuals and business owners.
   
   
2. Estate Planning: Trusts allow for efficient estate planning. You can specify how the property should be distributed among beneficiaries after your passing. This flexibility ensures that your wishes are honored and minimizes potential disputes.
   
   
3. Tax Efficiency: Trusts offer tax advantages. For example:
   
   • Income Distribution: Discretionary trusts (commonly known as family trusts) allow income to be distributed among beneficiaries, potentially reducing the overall tax burden.
   • Capital Gains Tax (CGT): Trusts may provide CGT concessions or exemptions, depending on the circumstances.
   • Land Tax: While trusts may attract higher land tax rates, proper planning can mitigate this impact.
4. Privacy: Trusts provide privacy because the property is held in the trust’s name rather than an individual’s. This can be advantageous for confidentiality reasons.
   

Concerns of Owning Property in a Trust:

1. Complexity and Costs: Establishing and maintaining a trust involves legal and administrative complexities. Trust deeds, ongoing compliance, and professional fees can add up.
   
   
2. Loss of Control: As the trustee, you manage the property, but the trust’s beneficiaries have beneficial ownership. This means you may lose some control over decision-making.
   
   
3. Stamp Duty: Transferring property into a trust may trigger stamp duty. However, some states (including NSW) allow nominal initial trust property settlements to minimize this cost.
   
   
4. Income Distribution Constraints: While trusts allow income distribution, they cannot distribute losses. If the property generates losses, these cannot be offset against other income.
   
   
5. Land Tax Implications: Trusts may attract higher land tax rates compared to individual ownership. Proper structuring is essential to manage this.
   

In summary, owning property in a trust offers significant benefits in terms of asset protection, tax efficiency, and estate planning. However, it’s crucial to seek professional advice



This summary is certainly basic but is broad enough to be reasonably balanced. It doesnt address many specifics eg who the trustee should be and neg gearing etc. Note sure I agree with the comment on control. Its true beneficiaries have a influence but not necessarily "control". The correct issue is who should be a trustee or trustee Director. Also estate planning - You cant leave a inheritance of trust property but may be able to leave trustee control. And as far as asset protection goes it doesnt mention family law and how a trust usually offers no protection in some spouse claims

I would consider the biggest thing it fails to consider is what the value is of good legal and tax advice specific to each individual. I woudnt be recommending AI to support a complex decision

 

1. 2. 3. and 4 are incorrect though.

 

I'll be interested to read what it spits out in 12 months time....

It's improving quickly!

 

It will if people are paying to have experts provide feedbacks to it. Once it is learned properly, no mere human accountants or financial planner can compete with it. BUT noone is paying for that yet...

 

I was wondering if you asked AI the meaning of life would it refer you to a Monty Python movie?

 

OpenAI is the fastest growing company in history and millions of people are paying $20USD per month, generating billions of revenue annually. The AI firms are also paying for content providers for their data to train and constantly improve their models.

 

We all know that but the data they used to build model are from public sources (otherwise, they will face expensive lawsuit). To get into expert levels, it needs more human experts to train (give input, a provide feedback) in all areas. It is not feasible to do it yet.

 

It will if thats the dataset it reads