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  1. #21
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    Jun 2005
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    Default

    I mention trusts because the opening post describes him as a trust lawyer, that is all.

  2. #22
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    Oct 2003
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    3,578

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    Quote Originally Posted by [email protected] View Post
    I mention trusts because the opening post describes him as a trust lawyer, that is all.
    he is a qualified lawyer and all lawyers know trusts so technically correct. He is technically call himself a Barrister as well.

    I hope he does one for the group meeting that I go to - will be fun to ask him some tough questions.

  3. #23
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    Jun 2004
    Location
    Auckland
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    274

    Default Property Guru does u-turn

    I wonder if my comments to leading financial journalist Rob Stock of the Sunday Star Times in "Property guru does u-turn" on July 18th of this year have helped Dean decide on whether to post or not:
    http://www.stuff.co.nz/business/3929...does-US-u-turn

    On a technical note, I am happy to agree I am a Trust Lawyer and not just a Trust Salesperson. Sorry I will not be offering you any referral fees/commissions Dean! I was very interested to hear your view that trusts are a "nightmare now".

    Saying Trusts are shams - a sales tool using fear?
    Interestingly at the NZ Law Society Trust Conference last year Jim Guest (a partner of Downie Stewart in Dunedin since 1982, an author of Heath & Whale on Insolvency, contributor to legal publisher Brookers Practice & Procedure, and experienced litigator) in his address noted that the "sham trust" case of Official Assignee vs Wilson [2008] 3 NZLR 45 (Court of Appeal) provided a lot of comfort to those with trusts and self managing them. Jim Guest's cynical summary of this case was that "it appears not to matter whether the 'client' is running the trust, even if not a trustee, or is benefiting from the trust even if not a beneficiary. Also, if there are none of the indicia of the trust's existence, such as resolutions or accounts, there will be no adverse consequences."

    From talking with other practitioners last year, an allegation of sham trusts has now finally been found in New Zealand and upheld in the Family Court (KWF v KWF). Regal Castings Limited v Lightbody & Ors was not about sham trusts, but about a creditor's rights to attack assets in a family trust (in terms of s60 of the old Property Law Act 1952 on alienation of property to defraud creditors). A cynical view I have heard from other lawyers is that if I were selling a book with the honest purpose to maximise sales income from selling my trustee service I would go to media and say that most trusts are poorly run, it is a sham etc.

    KWF v KWF is thought to have been the first case in NZ on a family trust being upheld to be a sham. Perhaps a bit less trust sales, and more trust law focus is needed by Mr Letfus and to stop scaremongering people into paying trustee fees, when they can be educated by being given a modern flexible trust deed and training on the crucial role as trustee in the family trust arrangement, so they don't have to be many hundreds of dollars down in trustee fees that are for so many people unnecessary, and merely a not always totally honest way to extract more revenue from 'trusting' clients.

    Say No to Hawkins Clauses
    While we are talking about trust law, lets talk about "poison pill clauses" or Hawkins clauses that some trust practitioners (particularly non-lawyers) think are smart! Since drafting my first trust in 1998 and having drafted many hundreds of asset protection plans (trusts, wills, memorandum of guidance, resolutions, powers of attorney) I refuse to draft Hawkins clauses.

    Where is the commercial reality in inserting a clause in a Deed of Acknowledgement of Debt (IOU) that has a loan for say 20 years (I have even seen 50 years!) that has no interest or inflation adjustment and can only be called up by a particular person. Note in Official Assignee v Stanford a Hawkins clause (from now on 'poison-pill' clause) was set aside and the OA got a summary judgement against the trustee on the debt. My recommendation is not to follow your trust salesperson's advice and follow advice from the NZ Law Society's Family & Property Law Section and not have any poison-pill clauses.

    Hope to have enlightened your inner guru a little bit more Dean, and wish you all the best for your future sales ventures and promotions.
    Last edited by David_W; 27-08-2010 at 11:19 AM. Reason: html code fixing to italics and bold

  4. #24
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    Sep 2006
    Location
    Christchurch
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    892

    Default

    There are some snippets from OA v Wilson in the thread I linked earlier.

    It is actually JFW v KFW, just case anyone intends to look it up. Personally I would view that case with caution. It seems to me that the Court of Appeal was prepared to take a much more robust approach in OA v Wilson than the Family Court did. I suppose the reality is that it's unlikely anyone is going to agree with all of the decisions in an area which is so dependant on the individual facts.

    Regal Castings Limited v Lightbody was very interesting, but as you point out is not related to the legitimacy of a trust. It is more a warning to people attempting to dispose of assets to a trust when they have existing creditors. Interestingly there are few articles on that (from trust salespeople anyway), perhaps because it doesn't encourage people to set up trusts. I have to admit to sharing your cynicism in that regard.

  5. #25
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    Hi David, not sure what you are on about. All I asked is whether you were a trust lawyer as it appeared you were not a specialist or a long term practitioner.
    And given that David Leon is involved in the business it is reasonable to assume there is a sales process involved, but I was solely commenting on propoholics post.
    I note you have left the question unanswered so we'll just have to guess.

  6. #26
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    Jun 2004
    Location
    Auckland
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    Default

    Thanks Xav - I missed the thread (https://www.propertytalk.com/forum/sh...628#post227628) before. Appreciate you giving the name of the case out, and to the non lawyers and trust salespeople reading the thread - cases at Family Court can be appealed and are not binding on the High Court, Court of Appeal or Supreme Court.

  7. #27
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    Sep 2006
    Location
    Christchurch
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    892

    Default

    Quote Originally Posted by [email protected] View Post
    All I asked is whether you were a trust lawyer.
    Actually you expressly questioned his ability in this area and recommended that people see someone else instead. Personally I don't have a problem with you attempting to discredit other property investment educators (although obviously I will defend them if I don't agree), but don't try to dress it up as something it isn't.

    If that was the only question you intended to raise with your posts why would you state:
    Quote Originally Posted by [email protected] View Post
    I note you have left the question unanswered so we'll just have to guess.
    given that David has expressly answered that question:
    Quote Originally Posted by David_W View Post
    On a technical note, I am happy to agree I am a Trust Lawyer and not just a Trust Salesperson.

  8. #28
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    Jun 2005
    Location
    auckland New Zealand
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    Thanks Xav, I had missed the "technical note" :-)
    And discrediting DAvid was the furthest thing from my mind. Having worked with him in his Fuzo days I simply found the statement weird as I had never heard him express being a trust lawyer ever and could find no record of it.
    It's also true to say that when I think of a "trust lawyer" I am thinking of a structure specialist rather than just a lawyer.
    Last edited by [email protected]; 26-08-2010 at 04:57 PM.

  9. #29
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    Auckland
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    I don't think Dean and David are in competition - last I knew, Dean had more experience with the other end of the law, rather than practicing it (that's why he now has experts on which to call when needed).

    The question was:
    Quote Originally Posted by Dean
    When did David become a trust lawyer??
    I don't know, but I'd guess than when he passed his law exams.

    If the question had been, as seems to have been the intention,
    Quote Originally Posted by Second Guessing what Dean wanted to ask
    When did David become experienced enough in Trusts to earn the trust of the PI community?
    the answer would be different for every one here.
    DFTBA

  10. #30
    Join Date
    May 2007
    Location
    Hamilton
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    3,604

    Default

    Quote Originally Posted by David_W View Post
    Say No to Hawkins Clauses
    While we are talking about trust law, lets talk about "poison pill clauses" or Hawkins clauses that some trust practitioners (particularly non-lawyers) think are smart! Since drafting my first trust in 1998 and having drafted many hundreds of asset protection plans (trusts, wills, memorandum of guidance, resolutions, powers of attorney) I refuse to draft Hawkins clauses.

    Where is the commercial reality in inserting a clause in a Deed of Acknowledgement of Debt (IOU) that has a loan for say 20 years (I have even seen 50 years!) that has no interest or inflation adjustment and can only be called up by a particular person. Note in Official Assignee v Stanford a Hawkins clause (from now on 'poison-pill' clause) was set aside and the OA got a summary judgement against the trustee on the debt. My recommendation is not to follow your trust salesperson's advice and follow advice from the NZ Law Society's Family & Property Law Section and not have any poison-pill clauses.
    Hi David,

    Interesting comments. I agree a Hawkins clause isn't bullet proof, but does it do any harm? Isn't it just another hurdle to make it harder for a creditor?
    Also my understanding of a Hawkins clause was that it just "could only be called upon by that particular person".
    I thought the other part was an entrenchment clause, which tried to stop the individuals loan to a Trust being immediately repayable. Normally the period is only 5-7 years max from a certain period in time.

    Most lawyers (not trying to criticise, this is more from my experience) do up loans from individuals to Trusts as "repayable upon demand". This means if anything ever happens to the individual, the Trust could immediately have to repay the loan.

    To protect the trust, and I think this makes great commercial sense from the Trusts point of view, having a period of time where the individual can't claim the loan back is great.

    Lastly, what is the harm in having an entrenchment clause (as long as done correctly)

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
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