By Ed Chan | www.chan-naylore.com.au | Submitted 23rd April 2009 Just as it is wrong to say that everyone needs a Trust it is also wrong to say no one needs a Trust. There are generally 4 reasons to have your assets in a Trust. The first being for asset protection. You don't want to work all your life and have someone sue you and end up losing everything. We had a client who was a Contractor to a builder and whilst working on the extension for a major Hospital one of the workers accidentally turned off the electricity on the refrigeration that housed the blood bank. Millions of dollars were lost in spoiled blood and the Hospital sued the Builder and the builders insurance company automatically sued all the contractors. Every asset that is in ones own name including the family home is now exposed to litigation. However if the assets were held in a Trust than these would not be exposed to litigation. There are many different types of Trusts and they are used for different things. For example the use of a Discretionary Trust maybe be great for asset protection but not good to hold a negatively geared property because the negative gearing in a Discretionary Trust gets trapped inside the Trust and you are unable to offset the losses against your wages. The use of a Property Investors Trust would be more appropriate because you will get both asset protection of the property plus you can offset the negative gearing against your wages. If you are considering holding a property in a Trust its best to see an accountant who specialises in Trusts because if you go to someone who does not understand Trusts than you will be confused by their conflicting advice.
