Family trusts and property... ?

DH and I have been wondering if it would be worthwhile for us to start a family trust.

We currently own 2 houses - one we rent out, the other we live in but rent out downstairs granny flat (plus we have a flatmate upstairs until March).

Could we save any money in our situation?

Has anyone had experience in family trusts? How easy/hard is it to set up? What do we need to know about family trusts?

TIA

Ummm the in laws have put their houses into a trust but mostly because when they retire they don't want the houses to be seen as their assets.

The only thing I know is that they had to have at least 3 people in the trust.. so they have FIL, MIL and DH as the 3rd person.. and they have to have yearly meetings about the property with minutes which is given to the lawyer. I don't think it saves them money, it probably costs a bit because of the lawyer involvement. But I think it was easy for them to set up, occassionally they pop over with papers for DH to sign about the properties.

But that's about all I know

If you want to set up a trust, better to start sooner rather than later as you can only gift $27K a year into it as far as I am aware.

Family trusts are generally to protect assests. They can also assist if a relationship breaks up and the partner who is not in the family is entitiled to take half. There are rules around this but it's pretty much a protection thing. I think it can also help in the event that you and DH both die.

An LAQC for your rental property is likely the way to go - you'll need a lawyer to set up the company and an accountant to process the annual accounts, but it means you can write things off etc and if everything is geared properly it should save you money. The thing to check though is what it will cost you to set it up - it can be a LOT of money as you'll need to regear your mortgages (usually cross guarantees are required), 'sell' the rental to the company ... all sorts and it all requires paperwork - inches and inches of it. Your legal fees, depending on your solicitor, would run to thousands ($5,000-$7,000 I would guestimate) and there are claw back issues to investigate as well. DH and I went the rental route with an LAQC a few years back, but I tried to stay really uninvolved in that side of things (even though I'm the one that works for a conveyancing lawyer!) and leave it up to the accountant to sort out, so I can make the suggestion and that's about it.

Trusts - you can gift $27,000 per year per person, and DH and I have a Trust with only 2 trustees - the third trustee is usually a 'protection' thing, and is also usually a professional such as a laywer or an accountant. I'd stay away from the Public Trust - you can usually kick a rugby ball through the holes in their docs.