1. How should a trader pay him/herself?
With a trading trust some of the profits will have to be paid to the trader as compensation for the trader's efforts (and in order for the trader to eat). How is this best done? Does the trader (who is also the settlor and a trustee and a beneficiary) submit an invoice to the trust, or is he/she retained on wages by the trust, or may he/she get a distribution as a beneficiary?
ACC obligations (if any) must also be taken into account.
Bearing these thoughts in mind what would be the better way to mimimise costs and time? Could a distribution be paid out out to just one beneficiary - the one who had effectively created the wealth? Would this negate ACC obligations? Would it effectively turn the trust into a sham?
2. After the resignation of a corporate trustee, is the settlor obliged to take on another corporate trustee, or is it perfectly acceptable to have just one person as the sole trustee?
In this case the settlor and the trustee are the same person, and also one of four beneficiaries.
3. If a person has accrued several mill worth of low geared buy-and-hold property in a LAQC structure is it worth bothering with a family trust at this late stage, bearing in mind gifting can only happen at the rate of $27k per year (with no spouse)?
Assuming no interest was payable this would take at least two lifetimes to gift all the property's equity over at todays values. Even with a Hawkins clause utilising an eight-year restraint there would be very little protection from a serious claim.
4. Would it be possible to marry someone, get them to sign pre-nuptials, keeping them at arm's length from the loot, but nevertheless speed up the gifting to $54k pa?
This last question is academic only. I imagine the pre-nups defeat the ability to gift. I can't see how you could gift what isn't yours (unless you're a politician).
Julian
With a trading trust some of the profits will have to be paid to the trader as compensation for the trader's efforts (and in order for the trader to eat). How is this best done? Does the trader (who is also the settlor and a trustee and a beneficiary) submit an invoice to the trust, or is he/she retained on wages by the trust, or may he/she get a distribution as a beneficiary?
ACC obligations (if any) must also be taken into account.
Bearing these thoughts in mind what would be the better way to mimimise costs and time? Could a distribution be paid out out to just one beneficiary - the one who had effectively created the wealth? Would this negate ACC obligations? Would it effectively turn the trust into a sham?
2. After the resignation of a corporate trustee, is the settlor obliged to take on another corporate trustee, or is it perfectly acceptable to have just one person as the sole trustee?
In this case the settlor and the trustee are the same person, and also one of four beneficiaries.
3. If a person has accrued several mill worth of low geared buy-and-hold property in a LAQC structure is it worth bothering with a family trust at this late stage, bearing in mind gifting can only happen at the rate of $27k per year (with no spouse)?
Assuming no interest was payable this would take at least two lifetimes to gift all the property's equity over at todays values. Even with a Hawkins clause utilising an eight-year restraint there would be very little protection from a serious claim.
4. Would it be possible to marry someone, get them to sign pre-nuptials, keeping them at arm's length from the loot, but nevertheless speed up the gifting to $54k pa?
This last question is academic only. I imagine the pre-nups defeat the ability to gift. I can't see how you could gift what isn't yours (unless you're a politician).
Julian
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