What is Asset Protection and why do we need it?
Asset protection is the use of smart, legal strategies to protect your business and personal assets. In addition, effective asset protection strategy is to review and understand risks and adopting measures to protect family and business assets for when something goes wrong.
For instance, during the good times and when the economy is thriving, we rarely think about potential problems or implications and as a result, by the time a negative event has occurred it is often too late to avoid loss of assets. It depends greatly on the nature of activities that have been undertaken to determine the level of risk to your assets.
In reality the key reasons to consider your asset protection strategies are in the event of:
- marriage breakdowns; and
Effective asset protection strategies need to be put in place early, well before any potential problems are on the horizon.
Think asset protection doesn’t apply to you? Think again!
In the event that you have assets in your name, you could be at risk. It is a myth that only the rich and wealthy benefit from asset protection. For this reason especially, the most effective asset protection strategies have been put in place well before any major wealth is created.
Are you are risk?
In addition to the above, please see below a simple checklist to help you determine if your assets are at risk:
- Firstly, are you in business?
- In like manner, do you have investments?
- Have you structured your affairs to isolate your wealth from risk? Or do you own everything and run everything in your own name or from the one entity?
- Have you obtained advice on the best structure for your business/investments and personal assets? This includes ensuring there are provisions in the trust to deal with bankruptcy.
- Are you a company director?
- Do you as a company director own your assets personally?
- Have you (as a director/shareholder) provided any personal guarantees for business/investment debts or liabilities in favor of creditors?
- Could you continue to meet repayments if an unexpected event occurred, like a tenant moving out of an investment property?
- Are all your assets/investments in your own name?
- Do all dealings between your related entities have enforceable security?
- Do you have written documentation of loans to the business/investment vehicle and do they hold appropriate security?
- Have you safeguarded your business against death, incapacity and relationship breakdown?
- Do you make regular superannuation contributions?
- Are you unknowingly exposing the personal assets of multiple company directors at risk?
- Do you have a partnership/shareholders’ agreement?
We are here to help
Need help safeguarding your assets? The team at Gerard Wilkes & Associates are here to help. Feel free to contact us at https://www.wilkes.com.au/contact-us/ or call us on 07 5532 1733 for assistance.
The above information is of a general nature only and should not be acted on without seeking legal advice on your specific situation.