Legal Tip 319: What is a ‘Vestey’ Trust?

I get a lot of emails asking me about ‘Vestey Trusts’.

There is no such thing at law as a vestey trust!

You will not find it mentioned anywhere in any legal book or anywhere else other than a certain group that markets the term. It is just a marketing phrase with no legal meaning.

Neither the word ‘Vestey’ nor phrase ‘vestey trust’ is trademarked either. See
Trade Mark 1940587 | IP Australia | Trade Mark Search

I have reviewed some of the deeds for these so called Vestey trusts too. I suggest anyone who has set up a so called vestey trust to seek independent legal advice asap.

 

One of the lawyers who is well equipped to give good independent advice on this is in Brisbane. He has represented many people taken advantage of in some terrible schemes.

Chris Baker at Hickey lawyers. Our Lawyers - Hickey Lawyers

I believe a very good article will be apearing in newspapers this weekend discussing snake oil "asset protection" merchants. This follows a earlier SMH article which indicated a degree of inflitration into some seminars associated with these behaviours which focussed on legal practice eg misuse of family court case information to identify and implement get rich schemes to the disadvantage of vulnerable people.

https://www.smh.com.au/national/pro...ourt-to-pinpoint-targets-20201127-p56iig.html includes a response by the legal practitioner involved.

 

you can read the denials about her knowledge of the referral to the court and of the involvement of her struck off parents with a very high degree of scepticism. Words on paper and many emails speak for themselves. Deny, deny, deny... even in the face of overwhelming evidence. The honourable legal profession! Thankfully there are those in the profession outraged and good lawyers like Terryw who give sensible and practical advice, not spin and BS

 

Reading into the Lord Vestey fortune was a old scheme (yes a scheme) which used a Paris trust (ie there is no such thing as Vesty Trust as such as that was the beneficial party) to avoid death & other taxes associated with intergenerational change in family wealth. The loophole was closed by John Major's Government in 1991 and recognised as a tax scheme. Its likely a sham marketing to defuddle, confuse and allow vast fees for what seems a complex web. But with rudimentary skills may be little but costly paper. The scheme is peddled as a complex but legal arrangement. But it failed modern "anti avoidance" UK laws in 1991 and doesnt give any regard for the Corporations Act 2001.

The history was given editorial which makes interesting reading Heirs and disgraces and like all UK families it involves kinky issues. I liked the lesbian murder bit.

and (1) Lord Vestey’s Executors and Vestey v Commissioners of Inland Revenue(1)*(2) Lord Vestey’s Executors and Vestey v Colquhoun (H.M. Inspector of Taxes)*(3) Lord Vestey’s Executors and Vestey v Commissioners of Inland Revenue(2)* (1946-1950) 31 TC 1 | Croner-i Tax and Accounting includes substantial transcript of the Paris Trustee arrangements in this earlier (tax) case the appeal was held in favour of the family which was later struck as a scheme under the Major tax reforms at the time. These cases were tax related and does not in any way suggest acceptance as a asset protection vehicle. But the very scheme is peddled as a scheme to avoid creditors including government. ie taxes. Modern Corporation Act issues would need independent legal advice. to determine how of if any protection is afforded. In one case the confusion was used to intimidate and create fear so that the property owner accepted a low ball predatory price contrary to their potential loss otherwise. (Read the SMH article)

 

Didn't mean a Westey trust by any chance?

 

Festy trusts have a infectious element

 

We get asked about this all the time. Marketing was well done by someone who said they were a barrister in QLD but could never find the name on the roll. There are also some other stuff with promissory notes and all sorts of interesting things where no money ever actually moves around. Good internet marketing budgets seem to entice people to spend way more money than they would have if they just engaged TerryW

 

https://www.smh.com.au/business/con...6cqfVi4EWCizx-8YTjWuKlZ7VX7OjgRMFIorGOlL4U0FE

 

Someone sent me a link to this podcast interview re this topic:

The Trust you can’t trust

 

Except the promissory note is no such thing. Is not for a sum certain so fails basic requirements of being a promissory note.

 

This fresh article should act as warning
https://www.smh.com.au/business/con...-grubisa-sells-her-wares-20201204-p56kqu.html

 

Yes. That's what I mean. people spruiking promissory notes and all sorts of weird things. But never for clients that have the money to move cash around to make the transactions real.

 

https://www.theage.com.au/business/...-grubisa-sells-her-wares-20201204-p56kqu.html

 

Here is a great write up..More expressive.

Dominique Grubisa, Master Wealth Control & Vestey Trust. I think ASIC describe it well...if it sounds too good to be true?

 

This is a shocking scandal. The Vestey Trust nonsense has been sold for years. There is absolutely no connection between the trust set up by the Vestey family and the plain vanilla discretionary trust set up as part of this product. Clients are told by setting up a friendly creditor that the equity in their world wide assets are protected and that they can never go backwards never lose a thing. The people who are on the phones selling this nonsense are all unqualified. They are sales people who have watched a few hours of nonsense training videos. People are told that no money needs to change hands. It is sheer and utter nonsense and thousands of members of the public have been ripped off. When put to the test where someone did run into financial difficulty, the nonsense spruiked became apparent.

 

Complaints to the relevant law society should be made if this is the case.
Possibly false and misleading conduct.

 

NSW Law Society made aware of this on 12 April 2019! Your Society! She's still out pedalling this nonsense

 

surely the law society would have acted already?

I recall the law society coming down hard on a lawyer who had announced that he would be helping people fight quarantine related charges. This happen on the day in which he made the comments, or the day after.

They act very quickly.

 

Who would prove it doesnt work ? If its never worked it cant be proven that it does not work. Where is the client loss ? I had a discussion with a well regarded barrister about this issue. Its how people peddle tax schemes. On the face of it it seems valid but the true test of failure is a ATO opinion. Too late then. Nearly every tax scheme has a QC, SC , Barrister or specialist opinion which usually has some difficult wording eg subject to ATO review specific to client circumstances. Best of the lot are sold as a fact, no uncertainty. And non-disclosure agreements etc

Its like property spruikers. Avoiding harm is the best saving. Nobody will be able to recover the losses.

 

Person in question in article in the Age article. Relied upon advice that no money needed to change hands. Went bankrupt. Trustee in bankruptcy wrote to the promoter and asked for evidence of actual loan - bank statements. There was no loan. Caveat had to be removed. It's patently clear on a quick review of the documents that they would provide ZERO protection if tested. A mortgage without a loan secures nothing. Good number of lawyers have looked at it and are shocked with claims made.