As usual, a transcript of the presentation for those that cannot (or choose not) to listen to the presentation is below –
There's a number of aspects relevant here.
The biggest one, if we pick up on that idea of it being a little bit of a messy structure, is that ideally there should be some sort of corporate entity that’s the face to the outside world. We see that being used very regularly.
Now whether that's a standalone nominee or agent
company that’s appointed to act on behalf of all the trusts or whether in fact
you just have one company acting as trustee for all of the trusts is probably a
mute point.
The outcome that’s delivered to the outside world is
that they're not having to deal with numerous separate trusts; as far as the
clients know, all they see is that standalone Pty Ltd company. That would
probably be the biggest thing.
The other types of things that need to be thought about
I guess are looking at the constitution of that company and making sure that
you've got an appropriate balance between directorship powers and shareholder
powers.
You'd also obviously, particularly if you're going to
use the same company as trustee for a number of trusts, need to have a fairly
good understanding of how an appointor or principal or nominee type power under
the trust documents work, to give everyone the comfort of knowing that they do
have ultimate say over ‘their’ particular trust.
Probably, the final point would be, and we've got
recurring themes coming through here, (this harks back to this concept of asset
protection) and that is, if you're serious about maintaining protection against
issues that might go wrong in the practice, it would really be quite important
in our view that the trust that is involved as a partner in the partnership of
trusts do nothing else but be a partner in that partnership.
So in other words, you don’t buy the investment
property in that trust and you don't have a listed share portfolio in that
trust, because otherwise you're potentially exposing all those passive assets
to the risks of the business.
Until next week.