David and Samantha signed an Agreement for Sale and Purchase to purchase their first home.  David worked as a business advisor and Samantha as a doctor.  They went to their lawyer to obtain advice about whether to own their new property in a trust or not.

Because both David and Samantha worked in jobs where they could be sued for their advice/actions, their lawyer advised them that a trust would be good option for holding their new house, as trusts are a good way of protecting a home from creditors.

Trusts ring-fence assets, meaning that provided the trust has kept proper paperwork and appropriate gifting has taken place, assets owned by a trust are no longer personal assets, so if one of the people who set up the trust is sued, creditors cannot reach those assets.

Everyone’s situation is different, so you need to take proper advice before you choose to set up a family trust.

Things to consider include:

1. If one party in a relationship transfers property to a trust during that relationship, it can be seen that that party is trying to defeat the other party’s rights, so is likely that the trust could be “busted” by the other party in a separation.
2. If you transfer a property to a trust for the purposes of hiding/shielding the property from existing creditors, or if you don’t keep proper paperwork for your trust, then it is likely the trust could be “busted”.
3. When deciding whether to “gift” all of the value of your property in one lump sum or $27,000 per year you need to consider the effect on rest home subsidies in the future, as gifting a lump sum can be seen as “deprivation of assets”, affecting your subsidy entitlements.