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Do I need legal advice to set up a trust?

My wife and I own an investment property that we would like to protect by putting it into a trust. I am on a higher tax bracket to my wife, so I’m thinking of distributing more to her. Is this something I can research or seek advice about how to set up a trust? Can I set up a trust myself or do I need to see solicitor?

Firstly, you can transfer your property into a trust, but you need to know the costs. This includes a valuation fee, stamp duty and solicitor’s fees. By transferring, you change the benefits of negative gearing and tax deductions, which might not be as beneficial inside a trust. You should get accounting and/or legal advice.

In terms of time, with a professional, allow for advice of one to two hours. Also note, if you lived in the investment property before it was rented out and then you moved out, you have six years before capital gains tax kicks in. Of course, as your wife is in a lower tax bracket, the gains could outweigh the tax losses of switching into a trust. Clearly, this underlines the benefit of getting advice tailored to your exact circumstances.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Wednesday, May 11, 2011

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