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

Claim is made that value of the security increases as the property increases in value. What????? There are so so many false claims made. The claim is made that it has been tested in law. Case referred to is 1988 Sharrment decision. Case has no relevance to the claims made. Sharrement involved whole series of actual transactions. Court found the transactions not to be a sham. That's irrelevant to the claims made regarding this product. The very worrying thing is that thousands of members of the public have been told they can never lose, never go backwards. Tell that to the person who lost everything.

 

It's embarrassing to hear a lawyer say that the caveator (trustee of the trust) gets "what they say they are owed". There's either an actual loan or there isn't. If there isn't the caveator gets not a cent, not unless they are prepared to commit fraud and make up a payout figure for a non existent loan. People are also told their assets are instantly quarantined. Even if there was some gift of cash to the trust which was then lent back - not what is told needs to happen - then no advice is given regarding s.120 - s.121 of the Bankruptcy Act.

And Paul, unbelievably people have been told they might wish to take their funds out of their SMSF and put it into the bank account of the Trust. Oh, and told that they can grant a mortgage over their SMSF to the trust!

Advice given includes the following

- As an additional layer of protection where you own a SMSF, we can mortgage the fund and/or its assets to the Vestey Trust

- If you have invested your superannuation in an industry superannuation fund, then these benefits may be more vulnerable if the government changed the law to allow it to draw money held by such institutions. In such cases you have no control over the fund manager. While the current law remains in force, your superannuation is protected, however as additional protection we can list your investment in the schedule of assets along with other items to be protected.

- While the assets in your superannuation fund are technically protected, if you have significant cash investments (eg term deposits or bank accounts) in your SMSF, then for maximum protection, you can transfer the cash to a bank account in the name of Trust

Shocking advice!

 

I read some promoter SMSF documentation (advice) issued relevant to the Vestey Trust as noted above and it may even be the same document on letterhead. Its appalling. If a solicitor issue that they should not be allowed to practice.

Its defies superannuation law incl SIS Act, SIS Regs, Corporations regulation and is unlicensed and blatantly false financial and legal "advice". NOBODY should act on that advice to have a SMSF involved with that trust. I have recomemnded that the ATO Assistant Commissioner of Super John Ford be advised on this practice so the SMSF Regulator - the ATO, can issue warnings. I trust they will also consider issue of s264 notices to identify all parties involved. The penalties could be as much as 45% of the amounts ins uper and more.

 

https://www.smh.com.au/business/con...1-2-million-mehajer-loan-20210129-p56xox.html

 

That was my thinking too, if anything is illegal or marketed wrongly why is she still practicing after 10 years?
Look at SMSF auditors, other solicitors/lawyers for any breaches their licenses are revoked?
So am I to assume just because she markets under one umbrella like some property spruikers and no case was tested it is legal?
What am I missing to understand?

 

Just out of curiosity @Vestey, what is your expertise since you are new here on this forum, sorry to ask but to satisfy my curiosity? Do you have a background in tax law, family law or financial industry?

 

If I told you what I really think I would probably get a reprimand.

 

I think we are on the same page, my values disagreed with someone's products or such selling on such terms.
I think to me it is about integrity first before I will part with any of my funds.

 

The article in Sundays' Age and SMH should be alarm for anyone involved in such dealings with a Vesty Trust and the parties involved. A matter for independent legal advice IMO. Chris Baker (QLD) is one competent solicitor I would consider.

Its behind a paywall so use Chrome ingognito mode : https://www.smh.com.au/business/con...1-2-million-mehajer-loan-20210129-p56xox.html

 

@Vesty is a shy individual. I can vouch for their competency. I would say yes to the above. They dont post a lot but have oodles of background and experience.

 

Further trouble seems to be brewing about the outrageous claims to use the vesty trust in relation to a smsf and to mortgage smsf assets. Further scare tactics that the ATO may "steal" super and describing the ATO as "pirates" are really a disgrace for anyone whether a qualified professional or not. It is likely a matter of what and when the ATO acts in its capacity as SMSF regulator. But they havent acted yet and as indicated below the do know about the concerns.

Anyone who has considered or is using a vestey trust in any capacity with super and has ever considered these claims should also seek independent legal advice . s55 of the Superannaution Industry (Supervision) Act permits advisers to be sued for loss or damages concerning super where the s52 covenants applying to all funds have been caused to be breached by anyone including an adviser whether paid a fee or not. Tax Practitioner Board and Law Society rules often require that fee nexus and pose a concern as it seems to limit actions. Super laws dont care about fees and look at harm. Breaches of covenents contained in s52(2) is just ONE of several serious legal limits. The ATO view below shares that same concern with s52(2)(g)

If tax advisers and legal practitioners have clients involved with a vestey trust you should review your risk. You could well be sued. I refuse to accept engagements from affected taxpayers.

Dominique Grubisa's 'Vestey Trust': Caveat emptor

One troubling concern is the ATO reply below is nearly THREE years old and no taxpayer alert or other public guidance on a mass marketed promoter concern has been issued.

 

Is troubling that ATO did nothing when they became aware of this in 2018. Only many thousands of members of the public involved. And the advice from the promoter is still there... hasn't removed such advice despite clearly being aware of the article.

 

I have been wondering if a super member could use s55 of SISA to sue the Commissioner ?

 

One of Ms Grubisa’s Companies seems to have been stripped of its credit licence recently.

Of all the possible reasons for why, ASIC chose the path of least resistance being that her Company hadn’t issued any credit in the last 6 months.

The “use it or lose it” rule.

 

Thats a basic compliance issue.

Of more concern is the extra info which indicates false or misleading information was being provided that certain companies or its representatives held qualifications which were not factual statements.
1. A Credit license does NOT MEAN a specifc license is accredited by ASIC in any specific way or as a 'specialist" being more knowledgable in any way to another licensed adviser. It is only a license to provide reguated services. It would be like me saying "ATO accredited to provide property tax advice"
2. Not holding a AFSL and claiming to hold one is a serious breach of AFSL use and Corporations Regulations. eg Melissa Caddick also misrepresented and misused another license as if it were hers.

At ASIC’s request, Ms Grubisa has also removed statements on the website located at Property Development & Investment Property Courses - DG Institute claiming she was an ‘ASIC licensed debt specialist’ and held an ‘ASIC Financial Services Licence’. ASIC said, neither Ms Grubisa nor her companies currently hold any authorisations or licence to provide financial services

ASIC said its investigation into Grubisa is ongoing.

I wished ASIC would act on apparent breaches of the Corporations regulations concerning promoting SMSF strategies and financial product information for smsfs previously raised in this thread and other places. The ATO so far hasnt acted to issue any warning or public guidance to well marketed harmful stratgies that involve a smsf as well as misleading comments concerning the risk of super through theft by the ATO.

SMH and The Age reported on 10 May 2021 "In a recording of an earlier webinar event to promote the Master Wealth product in April last year, Ms Grubisa warned prospective clients the coronavirus pandemic could cause the federal government to try to take their superannuation.

“If you have superannuation, you want to protect that now. The current laws say that’s already protected. But in a grab for cash and a time of crisis like this where the government is supporting the whole nation for an indefinite period, that is a big pool of money that is up for grabs and they have the the power to enact laws to take that. We want to protect it now,” Ms Grubisa said in recorded audio pubished by the news media. " Link to audio at https://www.smh.com.au/business/con...d-by-corporate-regulator-20210510-p57qfe.html

 

Grubisa is featuring in a story on A Current Affair tomorrow night

 

Did anyone see it on TV last night?

 

Missed it. Imagine it was wonderful appraisal of the excellent benefits of the value of a vestey trust ? Just checking the 9Now app 6mins into show. Love the surprise look in the shop !!

On par with the guy who sells those ladders and frypans ?

Predator warning. If the family court published lists of vulnerable children I would be horrified. But the parents are free game. How could she be a solicitor ? Isnt ethics a requirement ?... Oh she is "helping them" when they buy property under value. I was so misunderstood. And she claimed "professional priveledge"...Proof of giving legal advice and DGI isnt a law firm. How does that work ? The letterhead shows "Master Wealth Control"...Is that a law firm ?

That was also the name on docs used to promote a SMSF scheme. No word of warning from the ATO. I remember when Taxpayer Alerts and SMSFRs were issued as a warning to promoted schemes.

 

Most of the details are in this article I think The self-proclaimed property guru preying on divorcees

 

Dominique Grubisa has now been banned by ASIC from providing credit or financial services for 4 years, for failing to conduct herself with the professionalism of someone providing financial, credit service and having a habit of not telling the truth etc. However, this may not stop her continuing to provide a range of other services.