Tuesday, December 11, 2018

Blame it on the Sunshine – why I refuse to listen to Bing Crosby**: Final Post for 2018 and Season's Greetings

With the annual leave season starting in earnest over the next couple of weeks and many advisers taking either extended leave or alternatively taking the opportunity to catch up on things not progressed during the calendar year, last week’s post will be the final one until early 2019.

Similarly, the social media contributions by both the View and Matthew will also largely take a hiatus until the New Year as from today.

Thank you to all of those advisers who have read, and particularly those that have taken the time to provide feedback in relation to posts.

Additional thanks also to those who have purchased the ‘Inside Stories – Reference Guide (the consolidated book of posts) ’.

The 2018 edition of this book, containing all posts over the last year, edited to ensure every post is current, indexed and organised into chapters for each key area should be available early in 2019.

Very best wishes for Christmas and the New Year period.

** for the trainspotters, ‘Blame it on the Boogie’ (riffed for the title of today’s post is the Jackson 5 hit from 1978.

PS: And why I won’t listen to Bing Crosby … after 9 Christmas seasons in a row at Myer, there were many years when Bing’s Christmas album was the only music played all day, every day, for weeks on end. And one Christmas some genius in management thought it smart to play ‘White Christmas’ on repeat all day everyday for the last week of trading … (I won’t be watching).

Tuesday, December 4, 2018

If 6 was 9 – Trust Naming Conventions – Part IX **

Continuing on from the last post and the type of trust deeds that can be created, this week’s post summarises another five types of trusts:

Special Disability Trust – this type of trust is regulated by government legislation and allows relatives of a family member who has a disability to establish a trust that has concessional income tax treatment, and also allows for any family home owned by the trust to still gain access to the main residence capital gains tax exemption. There are a number of particular rules in relation to how this form of trust must be established and operated.

Employee Benefit Trust – this type of trust is often set up by business owners as a way to provide discretionary bonus entitlements to key staff. The structure was very popular for a number of years, however active Tax Office compliance has meant that the range of circumstances where this type of structure will be useful is now relatively limited.

Business Succession Trust – from a business succession perspective, it is often important to help manage the exit of an ultimate owner by obtaining insurance cover for events such as death, trauma and total and permanent disablement. While there can be a number of complex issues that arise, one way to structure the ownership of the insurance policies is via a special purpose trust, often referred to as a 'business succession trust'.

Blind Trust – a blind trust is one where the trustee is the only party disclosed as being involved in the trust and the standard phrase 'as trustee for [name of trust]' is not disclosed. In a semi-blind trust, the existence of the arrangement is maintained on trust records. With completely blind trusts, there is no documentation in existence supporting the evidence of the trust and everything about the trust relationship is regulated verbally.

Sub Trust – particularly in relation to a discretionary trust that make distributions to beneficiaries, with those distributions remaining unpaid for extended periods, the trust instrument will often automatically create a 'sub trust' that permits the beneficiary to any time call for the payment of the unpaid distributions.

Each of the above trusts is explored in View’s book – 40 Forms of Trusts – Workbook.

** For the trainspotters, ‘If 6 was 9’ is a song by Jimi Hendrix from 1969.