Set up a trust to buy a propety

I need entering an offer/purchase contract quickly under a trust name so that I can develop the property in future. I have not set up a trust yet. Therefore, I created a trust deed from Cleardocs.com.au service.

I signed Consent of Act and signed the trust deed as trustee execution with settlor's witness.

I lodged an application for ABN for this trust but ABN application has not processed.

I understand that I have to lodge the stamp duty with SRO within 21 days and open an bank account for this trust.

When does the trust become effective? Can I use this the trust name in the contract now?

Thanks

 

Additional information.

I cannot put "and/or Nominee" in the contract as agent has advised me that vendor would not sign a such contract. This property is in Queensland.

 

For a trust to exist you need a trustee, beneficiaries and trust property. You haven't said anything about the trust property or who the beneficiaries are. An ABN is not required.

I think put and call options work in Queensland and are relatively common. They allow you to achieve a similar outcome to an "and/or nominee" clause but potentially without double stamp duty.

Sounds like you could do with some legal advice.

 

Please get some (preferably legal) advice on the process, don't try to save a few dollars and do it yourself. If you mess something up, in the short term you might mess up the purchase process, in the long term it could cost you a lot more.

For example, you've registered for GST. With residential property, this is unlikely to be necessary, but now you've created a tax compliance burden.

 

The trust has only me as trustee and beneficiary. I has not bought a property but am entering a contract to buy a property. The reason why I use the online service because I need fast trust deed. I have to enter the contract today or tomorrow and do not have time to find an accountant to help me.

 

I'm backing away from this thread and leaving it to the experts, but..... I see fairly major some issues.

 

If you are a personal trustee and sole beneficiary, you have a merger of trust and the trust ceases to exist.

Also if you sign the contract before the trust exists, you may be liable for ad valorem or double stamp duty

 

You need to find a lawyer asap.

A trust is a relationship and doesnt exist as a legal person so it cannot enter a contract.

 

And consider how the deposit for the property will be paid and what the consequences will be.

 

As a more fundamental question - why do you think you need a trust to hold the property?

 

Taxation minimization reasons, transfer of assets to family members, succession planning and wealth creation to name a few.

 

In the right circumstances I agree, but none of these are going to be achieved while the OP is the sole beneficiary of the trust.

 

Knowing what I know now I would review this and buy in personal name if its your first development, discuss this with your accountant

 

I dont th8nk the op intends to be the sole beneficiary but the primary beneficiary.

Still a trust may or may not necessarily be a good idea as a number of factors need to be considered. If a trust is appropriate you must then consider how to structure the trust.

 

Fast will turn out to be expensive!

I any case a professional would have been able to do this entire process for you in 48 or so hours ..

 

Issues
- Negative gearing losses stuck in the trust
- Sole beneficiary ? if its positive geared
- Borrowing and limitations by lenders eg equity release etc
- Annual costs + upfront costs
- Personal liability as a human trustee

Using Cleardocs or other 24/7 online services can be like watching You Tube to learn how to do an appendix operation...on yourself. Fast and cheap but not recommended. There are a hundred mistakes you can make.

 

Thanks very much for replies. I had an accounting firm set up it.

 

To answer you questio n a trust is effective once the deed is executed and all parties and the settlor hands over the property to be held on trust.

If duty is not paid the trust is still valid. If there is no bank account it can still be valid.

 

Someone else told me this recently too. Does that mean you can save yourself $200 and not bother?

 

No. It would be a breach of the duties act and you would incur penalties. Soundslime you may be in vic