BULLETPROOF ASSET PROTECTION FOR PROPERTY INVESTORS
HOW TO PROTECT YOUR AUSTRALIAN PROPERTY EMPIRE FROM SCUM SUCKING, THIEVING LAWYERS AND THIER DODGY, FRIVOLOUS CLIENTS FOR GOOD!
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So now all that ugly legal stuff is out of the way here’s the article…
Australia is now the third most litigious country in the world and NSW is the second most litigious state in the world. If you invest in property then you’re unhappily in one of the top 3 most litigious games in the country. But “I like property” I hear you say… “There’s goos money in real estate” I hear you say. What if I was able to show you how to avoid these issues? Would you want to know how to make yourself legally bulletproof so no one would ever bother to sue you? Yes? Great! This is a complex issue but I’m going to try and make it as simple as possible. When someone decides, for whatever reason, to sue you the first thing their lawyer is going to do is a search on you and what you own. They’ll want to know if it’s worth suing you because if you have money then they may be able to get their hands on it. Since there are many lawyers work on a “no win no fee” basis if they do a search on you and find that you are flat broke, or worse, in horrible debt most of them will decline the clients case no matter who good it may seem. Even those lawyers who work on a straight payment basis are going to be very reluctant to take on a case where someone is trying to get money from a person who is in debt and owns nothing. So here’s what you basically have to do. Make it look like you own nothing and preferably are in horrible debt. How do we do that? We use legal structures like trusts and limited liability companies to make sure that whilst you control everything in your property empire, you actually own nothing. This can be achieved by having trusts of which you are the beneficiary and the Appointor of the trust. Further to that you will need a company structure that is the Trustee Company - and that’s all! Important!: This Trustee Company must not trade or do anything other than the ownership of the trust.
This is sometimes called a $1 company. Then when you buy a property, the property is put into the name of the trust not your own name. You will need to absolutely find a good asset protection lawyer who can help you with this. There are not many who really know asset protection so make sure you ask a lot of questions about it to make sure you are getting someone who knows what they are doing. When you buy a second property you will need to set up this whole system all over again. Here’s the deal - one trust company - one trust - one property. If you sell the property - disband the company and the trust and make a new one. Why? Because if you sell and someone trips over their own shoelaces 3 days after they buy the property, and 6 months later they decide that somehow it was your fault for not telling them about something on the property then you can sued retrospectively and if you’ve bought another property in that trust they may be able to access it. Going back to you personally, if your trust has equity in it then you could personally borrow money from that trust to put into another investment property loan (which you would buy in another trust) then it also looks like you have a large personal debt to this trust. No one can tell that you are only lending to yourself and therefor you look like you are broke, own nothing and have massive debt however you can own millions but all in legal structures where you control it but own none of it. Again, you MUST see qualified legal and accounting people. Make sure this is done right otherwise you could leave yourself vulnerable to attack. The other major benefit of this kind of structure (and your accountant can advise you on this) is that it is possible that you can reduce the amount of tax you are personally paying each year) There are many differing tax rulings about trusts and property so you must get advice from someone who specialises in this kind of area. Do not just go ask your family accountant and expect that you will get an accurate answer. To find out more about the right structures to use and how to protect yourself watch this free webinar http://InvestmentProperty.Training