The old question...we have scoured online forums and sources incl this one, over several years, while we have amassed our "portfolio". Now we have a 3 month old son.
Everything we read says "depends on your situation..."...
so we will give details ...
We have 5 IPs (flats, around $200k ea - all now cash flow positive making together, about $400pw profit) and just bought next IP (house, 3bdr, around $300k, slightly negative) in Chch. And have our own 3 bdr flat (mortgage free).
Both self employed and also business partners (LTD liability, 50-50). BTW our business is not high risk, high debt or high cost.
New baby.
Plan to hold properties 10yrs +, but aim to continue growing IPs maybe another few.
As self employed we have used that as our main income, don't have time to do high work/high risk/high payoff IP deals, focus on buying ok if not spectacularly well.
Now- do we form a family trust? Do we form an LAQC? Or both? I figure costs over 10 years could be $10K-$15K formation and maintainance - let alone extra hassle and compliance tasks.
So far all properties owned personally and equally. We have had advice from lawyers and accountants but can't escape the feeling people are suggesting trusts because "that's just what people seem to do" rather than for any solid benefit, other than "possible accounting flexibility" and possible asset protection. Other benefits, such as LAQC shares can be given to a trust without depreciation clawback etc we are not clear for our situation... -
and would costs outweigh benefits?
Should we set up an LAQC? We should mention we pay off debts ASAP - so never seem to be negative for long. We lean towards setting up a trust - should we just "trust" that it will turn out the right thing to do and we'll be glad to have done so? And when is the right time to do - we are early-late 30s and looking for our next home which will be a big step up from current one. Is it now?
Any thoughts on our situation and TRUST vs NO TRUST vs LAQC appreciated.
Everything we read says "depends on your situation..."...
so we will give details ...
We have 5 IPs (flats, around $200k ea - all now cash flow positive making together, about $400pw profit) and just bought next IP (house, 3bdr, around $300k, slightly negative) in Chch. And have our own 3 bdr flat (mortgage free).
Both self employed and also business partners (LTD liability, 50-50). BTW our business is not high risk, high debt or high cost.
New baby.
Plan to hold properties 10yrs +, but aim to continue growing IPs maybe another few.
As self employed we have used that as our main income, don't have time to do high work/high risk/high payoff IP deals, focus on buying ok if not spectacularly well.
Now- do we form a family trust? Do we form an LAQC? Or both? I figure costs over 10 years could be $10K-$15K formation and maintainance - let alone extra hassle and compliance tasks.
So far all properties owned personally and equally. We have had advice from lawyers and accountants but can't escape the feeling people are suggesting trusts because "that's just what people seem to do" rather than for any solid benefit, other than "possible accounting flexibility" and possible asset protection. Other benefits, such as LAQC shares can be given to a trust without depreciation clawback etc we are not clear for our situation... -
and would costs outweigh benefits?
Should we set up an LAQC? We should mention we pay off debts ASAP - so never seem to be negative for long. We lean towards setting up a trust - should we just "trust" that it will turn out the right thing to do and we'll be glad to have done so? And when is the right time to do - we are early-late 30s and looking for our next home which will be a big step up from current one. Is it now?
Any thoughts on our situation and TRUST vs NO TRUST vs LAQC appreciated.
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