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Plainsong you are absolutely right - it is insane and it's getting worse. We all think of California US as being the world's worst for litigation but on a per capita basis NSW is the 2nd most litigious and QLD the 5th most litigious place in the world. Bill PS Plainsong (or anyone else)...

Have heard of many instances where insurance claims have been denied. There are other insurance risks eg your insurance company could go broke like HIH, leaving you liable. You could be sued for an amount above the limits of your insurance coverage. (Greedy lawyers and plaintiffs want both your...

Hi BC, Best way to protect a property when not using a trust is where possible have the property in the name of the partner that is least likely to get sued. Then have the property appear as highly mortgaged as possible - preferably using some form of cross-securitisation or 2nd mortgage...

Great point Tubs - The number of dishonest people may be small but they can have a devastating effect if you are the one attacked. I have a business practice in a shopping centre, and there are many stories of purported "injury" claims that are clearly falsified when viewed on security cameras...

Hi Beach Bum, The bankruptcy trustee can only access what a person owns or is owed - outststanding loans included. If there are assets inside a discretionary trust with a corporate trustee they can't be accessed as they don't "belong" to the hotel owner. Corporate trustees if well designed do...

Hi Ebbie, Big brother is alive and well in Australia! A search of your credit reference association file and land titles will often tell who your lenders are. Creditors can find your assets and mortgages by using court examinations, subpoenas, depositions or professional asset searchers (who...

Hi Beach Bum, It's not always about cheats -somtimes there are simple everyday accidents and things you have no control over eg Recent Peakhurst Inn case: "A thief was trying to rob the Peakhurst Inn Hotel, in Peakhurst N.S.W. and tried to enter via the manager’s flat. The manager...

Yes Ebbie, From the outside searches will show a mortgage of $500K but as far as the lenders concerned you still only owe the $200K on the property. Bill

Hi James, I have sent you a PM on this matter Bill

Thanks Mikhaila, You are correct, cross collateralisation itself does offer some partial asset protection in that you have reduced equity available but it is not as clear cut legally as there is usually no official mortgage over the property used as backup security (eg your PPOR). You...

Brenda most ethical asset protection consultants insist that insurance is the first line of protection. I agree that if you are truly negligent you should pay. If you own an IP inside a trust and the trust gets sued, any assets inside the trust are still available for damages. Asset protection...

Hi James, When you borrow for an IP but have an existing asset (eg your PPOR) tied as direct security for this loan that is cross collateralisation at it's simplest. The lender has both properties as security and if you default they can sell either or both to recover their loan. If you own...

Hi James, If you have an LOC with the same lender that overstamped the PPOR mortgage then I believe you would still have access to the $300K as they already have the "security". If you had an LOC with another lender you would have to terminate it as part of the cross securitisation. As far as...

Hi Keith, In some circumstances it would but you have more complexity. You must have legitimate grounds for legal entities like mortgages or a court case can set them aside as a legal fiction eg you would have to appear to have borrowed money from the trust for the trust to have the mortgage...

Thanks Rolf, If you own property or assets you are always vulnerable to someone - I would rather be vulnerable to a lender rather than the tender mercies of a court case! At least you know the rules before you go into the game! I agree on your one lender one structure comment - so much...

Hi Mikaila, Cross securitisation is one of the best asset protection techniques outside of a trust structure and indeed you want to look worthless but you can't just get a LOC and draw out equity from your existing unprotected asset. If you take a LOC on an existing asset and then loan the...

As Rolf mentions Cross Securitisation is effectively increasing (overstamping) the mortgage on an existing property. Eg unprotected PPOR value $500K mortgage $200K = exposed equity $300K Buy new property (Ignore stamp and legals for simplicity) value $300K in a trust (corporate trustee)...