From our experience, when it comes to purchasing property through a trust, many people get confused as to what name goes on the contract of sale. Hopefully this article will remove any misconceptions and put you on the straight and narrow.

While this is a legal area and readers are advised to consult their solicitor on such matters, we thought we'd share with you our experience.

If you are purchasing for (or via) a trust, the name that goes on the contract of sale is the trustee. The trustee is the one who is registered as the legal owner. There are only two different types of trustees, one is a company as trustee and the other is an individual (or individuals) as trustee(s).

To help clarify this concept, here are two examples.

In figure one, John and Sue Smith are trustees for the Smith Family Trust, therefore on the contract of sale you would write John and Sue Smith.

If your structure has a company as trustee, as in figure 2, then the contract will show the legal owner as XYZ Pty Ltd and that is it, that's all you write.

In both these circumstances above the words "as trustee for the [name of trust] trust" are not needed, only the name(s) of the trustee(s) is needed.

The exception to this rule is when you purchase in Queensland where it's a requirement to stipulate if the person or company is a trustee. In this case, the name on the contract of sale would be: (name of trustee) as trustee for the (name of trust) trust. For example, John and Sue Smith as trustees for the Smith Family Trust. But this is only necessary for the State of Queensland.

So why is this important?

Firstly, for those who are in the process of establishing a new structure, as soon as they know the name of the trustee, they can proceed with the purchase of an investment. Secondly, if you have a trust structure it's important that you use the correct name of the trustee, to avoid any ownership and tax complications in the future.

As mentioned, this is a legal area and readers should still consult their solicitor on such matters.

 Ed Chan is a partner in accounting firm Chan & Naylor, a top selling author and co-founder of Wealth Retreat 2007 - Australia's  ultimate learning and networking experience for investors and entrepreneurs.

---------------------------------------------------------------------------------------------------

     Discover how to structure your finances and accumulate property using little or none of your own money.

2 DVDs -  2 hours, including transcripts >>Click here for more details<<

---------------------------------------------------------------------------------------------------