This is the first in a series of articles looking at how you can protect your hard earned assets; your home, your business and/or your investments.

Like all financial matters, you must have a strategy. Unfortunately for many their asset protection strategy stops with insurance believing this will cover them in those unforeseen circumstances.

Typically an insurance policy protects you for fire, theft, loss or damage and is critical but not absolute when it comes to protecting your assets. Unfortunately I have seen many people lose their assets or investments as a result of not having the right structure in place.

The risks that businesses face include:

  • Bankruptcy
  • Employee Fraud
  • Legal Action
  • Change in Government policy
  • Change in the way business is done
  • Change in people spending habits
  • Insurer denying a claim

By not protecting your assets from the above events your run the risk of having to use your hard earned assets to meet a liability which can come from employing people, operating a business, buying and selling goods or services, renting a property or strangely enough even from not having appropriate or sufficient insurance.

So how can you stop, or at least reduce the risk, of losing your hard earned assets if someone decides to press charges against you?

The best asset protection strategy is to separate your assets, or more importantly the ownership of those assets, from the risks.

For example, a business or investment rental property could be “owned” via a Family Trust while your private home is “owned” by a non working spouse. Other options may include using a Company or Superannuation Fund to “own” assets.

However, any strategies for asset protection must take into account your whole situation and not just one small part like your business or investments. You will also need to take into account the tax laws, other costs like stamp duty, land tax, nature of finance, assets and cash flow.

Remember that it is often too late to do anything once action has started, and in some cases, you may need everything in place for at least 6 years before you are ‘safe’.

If you are worried about your situation, which assets you could lose, or are unsure if you are ‘safe’, please do not hesitate and contact us for a review of your asset protection strategy. A proactive and preventative  approach is always better than a reactive one!

Remember, we’re here to help.

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