Asset Protection: What do you want to know

[datto]

This would also work.

True... but it would make the game of hockey for instance, very difficult to play and very funny to watch lol

 

[DavidMc]

Hey that is that asset protection - or are you protectinng your assets from excess duties and taxes?

I haven't looked at the NSW budget yet, but they probably just changed the rules today.

I note your points - it's not strictly asset protection and the rules change frequently, however the truth is the majority of your potential customers would be very interested in this and I believe it will help you sell more copies.

I have done some maths and land tax can make a huge difference to ones gross retirement income, as much as 25% (using the standard 'buy 10x median priced properties then sell half' strategy).

Obviously it shouldn't determine an investment decision but it is an important consideration anyone involved with trusts needs to be aware of.

e.g. I made a mistake and am now paying $1,700 pa extra in land tax - on two regular properties in one state.

 

[s0805]

can I ask people is there anything in particular you want to know about asset protection, any areas you would want covered in such a book?

Terry, assets protection scenario for couple where everything is in name of
one partner(high earner) but both of them working together to reduce the bad
debt and invest simultaneously. But when low earning partner get sued, assets under high earner's name is not safe cause both of their money is used to build those assets. How to avoid this and plan for this in future....

i know you've covered this briefly in one of my forum topic but i think
it was surprised for some that this could even happen....

thanks

 

[alexlee]

Might be worth discussing, when is it too much asset protection? Does structuring to avoid very unlikely events (e.g. low income partners who are employees getting sued) lead people to use overly complicated structures and actually create other risks (loss of control of assets, say, or difficulty in refinancing).

 

[alexlee]

But when low earning partner get sued, assets under high earner's name is not safe cause both of their money is used to build those assets. How to avoid this and plan for this in future....

Do you actually have an example or case of this happening?

 

[Terry_w]

This happens.

The trustee in bankruptcy will argue one spouse owns the property 50% as trustee for the other - even though no formal trust agreement exists.

 

[Terry_w]

Might be worth discussing, when is it too much asset protection? Does structuring to avoid very unlikely events (e.g. low income partners who are employees getting sued) lead people to use overly complicated structures and actually create other risks (loss of control of assets, say, or difficulty in refinancing).

This happens all the time with trusts. People put assets in trusts thinking they are safe from bankruptcy, but forget that control of a trust is only temporary.

 

[alexlee]

This happens.

The trustee in bankruptcy will argue one spouse owns the property 50% as trustee for the other - even though no formal trust agreement exists.

On the other hand, what would a low income spouse, most likely an employee, get sued for anyway? For that matter, even a high income employee is unlikely to be sued due to their job.

Do you ever see clients wanting to 'asset protect' away risks which are very low probability anyway, but in the process create new risks (e.g. putting everything in trusts and then losing control of those trusts)?

 

[Terry_w]

On the other hand, what would a low income spouse, most likely an employee, get sued for anyway? For that matter, even a high income employee is unlikely to be sued due to their job.

Do you ever see clients wanting to 'asset protect' away risks which are very low probability anyway, but in the process create new risks (e.g. putting everything in trusts and then losing control of those trusts)?

I haven't seen anyonne lose control of a trust. The biggest risk in this regard is death and the passing of control away from the appointors children to that of another family member who is also a beneficiary.

Risks of going bankrupt are very low for non-business running paye types. But the thing is you never know when you could end up running a business or become a developer etc.