Vestey Trust can anybody help?

Discussion in 'Legal Issues' started by Didi, 4th Jun, 2018.

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  1. Didi

    Didi New Member

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    Hi there
    I am trying to protect my assets from Westpac bank where I have a mortgage that I owe over $500k and the property has declined to the value of $200K
    I have other properties with Comm bank bank with no cross calateral with Westpac.
    One of these properties is like the one above and the other 2 properties I have only has a small amount of equity, this along with some shares, cash and another small property in Nz are what I am trying to protect from both the Westpac and the Common wealth Bank.
    Is there a trust (be it the Vestey Trust) that I can set up to protect these assets?
    If so can somebody tell me how I can do this myself without costing me a fortune in fees please.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    No.
     
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  3. Didi

    Didi New Member

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    DG enterprises states that they can set this up at a cost of $7200.00
     
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  4. Trainee

    Trainee Well-Known Member

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    And do they guarantee that the assets will be protected? Even if trusts could provide asset protection in some cases, you cant do this after the fact. Buying lottery tickets with the 7200 might be better.
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Are they a legal practice?
    What about the claw back legislation in the bankruptcy act and the state legislation.
    What about the section of the bankruptcy act which can make contracts void - including mortgages.
    What about imperfect gifts being attacked because nothing but a promise?

    I could set it up for you much cheaper, but you have to face the facts about its effectiveness.
     
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  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Even if her system worked you would need to transfer the properties into it as they aren't the current owner of the asset. Transferring the asset in would require stamp duty and transfer fees which would be substantial.
    Are you sure you want to keep these assets? Are they Gladstone?
    Are they all in your personal name?
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    No transfer necessary.

    All you do is to make a gift to the trustee of a trust and then borrow it back, interest free, and offer the trust a second mortgage over existing property you already hold.
     
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  8. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Ah ok.
    As you say though probably not going to protect if still open to claw backs and other issues.
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It could potentially help - if the other party sees a second mortgage and just gives up for example.

    But if challenged it would be weak, especially as there are current creditors which are trying to be defeated.
     
  10. jrc

    jrc Well-Known Member

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    Do a binding property settlement with a spouse.
     
  11. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    Terry, myself or other structuring lawyers could set you up with multiple entities for those fees. Contact Terry and see if he has capacity to look after you and get proper advice.
     
  12. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    This old trick doesn't really work now.
     
  13. Simon Hampel

    Simon Hampel Founder Staff Member

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    Why would you want to do that?

    Are the banks coming after you? Have they called in the loans? Are you meeting repayments? Are you intending to continue meeting repayments?

    What you've got is an unfortunate situation where the assets you purchased are worth less than the loans used to purchase them. That sucks, but protecting those assets is not your main concern right now.

    From your description of your asset base - you've got almost no other assets, you've got a mountain of debt and you've got multiple properties which aren't likely to go up in value enough in the next decade to recover anything close to what is owed (are they?).

    You are basically insolvent and I doubt that's avoidable. You might get away with it if you continue meeting your mortgage repayments - but to what end? To pay for an asset worth less than half what you've paid?

    I would be urgently seeking the advice of a personal insolvency adviser (usually chartered accountants or solicitors - google "personal insolvency adviser") who can analyse your situation and advise on the possible approaches for dealing with this.

    There may be opportunities to negotiate with the banks - the sooner you start, the better for you - don't put it off. Get good advice and then act on it - don't delay.

    Here is a good place to start reading: Australian Financial Security Authority | Supporting better outcomes for consumers, business and the community.

    At the end of the day, if there's no chance of negotiating with the banks, your best outcome for the long term may be to declare bankruptcy and then start again. I wouldn't be trying to hang on to worthless assets. This is where advice is really important. The sooner you start, the sooner you'll be out of bankruptcy and able to start again.
     
  14. Didi

    Didi New Member

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    Hi Simon
    Thank you for your advice.
    The banks have not called in the loans, I have only stopped paying the westpac loan and have a manager on my case knowing I am going through hardship.
    I've only had a letter stating I had not paid my loan, nothing else.
    I was told that there would be no transfer fees as the assets would be gifted to the trustee or the trust, then I could borrow it back interest free.
    I was told by DG Insustries that only lawyers such as PwC in WA could set this sort of trust up for me to be water tight, I have since found somebody else who can do it for me but as yet I don't know the cost to do all this.
    Thank you I will read the above link, I am so sick of going round in circles and working for nothing but to pay the banks back.
    Unforeseen circumstances and bad partners lead to my situation and bad timing had a part to play.
     
  15. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Who told you this:
    "I was told that there would be no transfer fees as the assets would be gifted to the trustee or the trust, then I could borrow it back interest free"

    it is incorrect, but I think you have misinterpreted what they have told you.

    "I was told by DG Insustries that only lawyers such as PwC in WA could set this sort of trust up for me to be water tight, I have since found somebody else who can do it for me but as yet I don't know the cost to do all this."

    This is also incorrect. PwC are an accounting firm and are not lawyers from what I know. There is no lawyer that can set this up to be water tight as there is legislation to prevent this. See s120 and s121 of the Bankruptcy Act for starters and also s37A of the conveyancing Act NSW or the eqivalent in the state in which the property is located.
     
  16. Trainee

    Trainee Well-Known Member

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    What would you do if youd made money on those ips and the bank wanted part of your profits?
     
  17. Didi

    Didi New Member

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    They could have it!
     
  18. Luisa Manera

    Luisa Manera Member

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    Hi

    I was wondering how you sent with this Vestey Trust. Did it work at all?
     
  19. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Hoping on one legs will work as an asset protection strategy if no one sues you
     
  20. 5080

    5080 Active Member

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    Register a caveat on the property so there can be no dealings on it. The particulars of how to do it would be best done by a solicitor. This is part of what they do with the Vesty trust, You become the straw man. Also you should do some research on how to become a 'Real Man'.
     

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