Using a Family Trust to Buy Real Estate?
- There are many good reasons for using a Family Trust to Buy Real Estate, particularly when the property will not be used as your home.
- Where you don’t have a Family Trust, we can discuss the pros and cons with you, and create the Trust documents.
- When buying in a Trust, there’s a lot more to the process than simply writing the Trustee’s name on the Contract.
- These suggestions will help you get organised & make the buying process streamlined and stress-free.
Before You Start
- Make sure you have the original signed and dated Trust Deed and any Deeds of Variation.
- Read these documents and note the name of the Trustee to be written on the Contract.
- Talk to your Lawyer about whether any changes should be made to the Trust Deed; and the finance arrangements for the purchase.
Completing The Contract?
- The correct name is the full name of the Trustee plus “as Trustee for the … Trust”.
- If John & Mary Smith are the trustees of the J & M Family Trust, the name of the Buyer is “John Smith & Mary Smith as Trustees for the J & M Family Trust”.
- If you are borrowing money, make the contract subject to finance and allow 4 weeks to obtain a loan approval and to review the mortgage & guarantee documents.
- Some Sellers require personal guarantees from the Trustees or the Directors of the Trustee company.
Signing The Contract
- Where 2 or more individuals are the Trustees, each person signs the Contract.
- If the Trustee is a company with 2 Directors, both persons sign the Contract as Directors.
- Where the Trustee is a company with a sole Director and Secretary, that person signs the Contract as Sole Director / Secretary.
- Your Lender will require the financial accounts of the Trust, and the personal financial accounts of the Trustees or Company Directors.
- Your Lender will review the Trust documents to verify that the Trust has the power to buy real estate and borrow money.
- The Trustees or the Directors of the Trustee company may be required to provide personal guarantees.
Certified Trust Documents
- You will need to provide a certified copy of the Trust Deed and any Deed of Variation.
- A Lawyer or Justice of the Peace can certify these documents by:
- reviewing the signed original documents and comparing them with the copies;
- signing every page of the copy documents;
- completing a certification verifying that they are complete and correct copies.
- The Trust Deed does not need to be stamped with the Qld Office of State Revenue if it was created after 1 March 2002.