Grow your income with a trust for the future

We introduced this product in January 2009 as the Treoc Pension Trust, but after I received numerous questions on how to ensure growing income to make continuous refinancing possible, I realised that many people do not understand the multiple-use purpose of this trust. Maybe the name was a bit misleading. Therefore I have decided to change the name and content slightly and re-launch it as the Treoc PROVIDER Trust.

I’ve often written about how suitable a small property portfolio in a trust is as a sustainable pension that keeps pace with inflation. A portfolio like this is also an excellent provider for income and the cost of your children’s tertiary education. Over the years a lot of our members have set up portfolios with these goals in mind, but in most cases the good intentions have faded and changed, or have been forgotten entirely. I did a bit of investigation and came to the following conclusions:

1. The pension goals get forgotten very quickly and the trust is then treated like a typical “money making machine” trust where refinancing takes place continually.
2. As soon as the equity amount becomes substantial, greed takes over in some people and they want to get their hands on it. And they don’t just refinance the house, they often sell the property to get access to the money.
3. As soon as the economy weakens, the long-term plans are overshadowed by fear, and bad decisions are made. The result is usually a lot of self-reproach when the market turns again later – as it’s been doing for centuries already. Then we want to start from the beginning again; but with a pension plan you can’t afford to start over again each time. Every year later is one year fewer, and when you look again there’s no time left anymore to build a pension.

A trust that is set up for provision and pension purposes must be treated completely differently to the property trusts or so-called “money making machine” trusts that we talk about at the seminars. To help our members make a clear distinction between ordinary property trusts and provider trusts we have, together with our trust attorneys, designed a trust deed that does not just look different, but is also managed differently. The wording of the trust deed and the administration of the trust make it resistant to all temptation, thus ensuring that the long-term goal can never be ignored. .........................

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