IP's and being young

[Bangers]

Hi All,

I hope this topic doesn't offend anyone, I'd just like to do my books on it, even if it's for curiousity's sake.

I'm 22, currently single, and don't even have a girlfriend (I hear claps in the background? ) My question is, it's been extremely evident in the last 4+ years of the numerous cases of Breaks up, and the following 50/50 split of ownership of investments and property. I know personally 2 people (men) who have had this effect them directly. In both cases, the ex-wife took the kids, and because of this, also took the house leaving the father with also.

I just want to safe guard myself from letting this happen to me. I don't want to to sound like an idiot or someone not willing to share his things with his significant other. I honestly wouldn't even expect anything like this to happen, but that shouldn't stop me from enquiring.

From my understanding, a pre-nup says "From this point onward, any future investments we make are shared 50/50". I do see myself getting a pre-nup for marriage, but before than, in the typical dating scene of a 20 something person, what precautions can I take? Is it true I can i can get myself into some trouble even after taking a girl for 6 months, and letting her live with me for free? I honestly don't know.

Thanks,
Matt

 

[alexlee]

Even if you're not legally married but have been living together for a while, the law can deem you have a defacto relationship and all the usual asset split rules apply.

If you're really worried, put your assets into a trust. Talk to an accountant and lawyer and read a few books on trusts. The basic idea with a trust is that the trustee holds assets on behalf of the beneficiaries (which may include yourself, family, companies, whatever). So say someone wants half of your assets, you don't actually own anything because all the assets are owned by the trustee for the benefit of the beneficiaries.
Alex

 

[lizzie]

if you have been living together for six months then, in the eyes of the law, you are defacto - which is the same as being married - and six months can go in the blink of an eye.

as i understand it ... prenups have no legal value in this country. they can be written up prior to a relationship and bought to court, in the event of a spilt, to show "intent" but are not legally binding.

just keep those points in mind - a trust or company structure would be safest.

 

[Merovingian]

Not to mention trusts and companies can provide asset protection from the possibility of being sued, and may provide benefits tax-wise...

 

[Rolf Latham]

Best of luck :O)

Most co habitation agreements and structures can be (and are) unwound by the family court, more so where longer term relationships are involved.

I can only speak for the experience of many of many clients.

ta
rolf

 

[alexlee]

So Rolf, have you ever seen pre-nups upheld in a divorce situation?
Alex

 

[Aceyducey]

Hi Bangers,

Your other choice is to become a monk - but then you have to give up 100% to the church.....

If you're not prepared to give all your world possessions to a partner, then they're not the one for you.

Cheers,

Aceyducey

 

[alexlee]

The divorce rate IS very high, Bangers, but you also have to balance it out. I know a guy who is about 70. Rich as heck but he always worried women were after his money, so he never got married and never had kids. Pretty lonely guy now.

Still, a trust structure can't hurt, if your worried.
Alex

 

[tubs]

My undestanding

Hi

Sorry Lizzie, but I disagree with you on both your points. From my understanding pre-nups are now legally binding in the family court, and that court has the power to tear down trusts like they were never there. Having said that, this is only where it can be shown that the trust was used personally by you. If it was genuinely for the benefit of its beneficiaries, then you may be OK. For example, if income was genuinely being distributed to them, if they had contributed to the trust at some stage etc.

You'd need to have some significant equity before it would be worth anyones time trying to go through you first, as it would cost a lot of money in legal fees for someone to attempt it.

Tubs

 

[Chev]

Tubs is correct.

A couple of issues raised.

1. Family court does have the power to "lift the veil" behind corporations and trust structures and all assets controlled and operated by one of the parties are considered to be a part of the matromonial pool of assets.

2. 6 months relationship in Queensland does not equal de facto relationship as recognised under the Property Law Act (de facto separation) (soon it will be all part of the federal family court jourisdiction). You need to be living together for over 2 years OR have a child together. (ie living together for 6 months and have a baby together = de facto)

Don't forget that the court will look at a large range of factors in determining the % division of your assets including: length of time together, whether financial resources are pooled together during relationship or kept apart, who does what in the relationship, what the earning capactity of each party and who brought what assets into the relationship.

3. Prenups- recognised binding financial agreements are valid and binding on the whole. (as i understand it unless really exceptional circumstances occur, a court will adhere to it)

Conclusion - dumping assets into structures is not sufficient for asset protection against your wife/girlfriend. Prenup is generally binding, and to be absolutely safe if you have someone in the family you trust, then it can be done (via debts and loans). Alternatively there are other means of doing it involving international structures.

 

[XBenX]

Simple solution - make sure your partner has more assets than you.

Works well in the $$$ dept as well other areas

 

[alexlee]

That has its own problems. Harder to make decisions: a democracy of two doesn't work very well.
Alex

 

[Rolf Latham]

Simpler soln ??

Make the relationship work and dont go there to start with

ta
rolf

 

[EstatePreneur]

Simpler soln ??

Make the relationship work and dont go there to start with

ta
rolf

This is a very interesting thing I never thought of, i.e. our partner, be it girl friend or boy friend, wife / husband who is after our wealth.
But, the above is very well said.

I would ask myself, then why would we bother to get into a relationship if it worries us so much. But having said that, I think it's also wise to be safe than sorry later.

Well if we're still worried, I'm not sure whether this is do-able...but here we go...why don't we and our partner sign some kind of a contract/agreement about ownership of assets, we can include a clause that says something like 'if divorce happens, all assets will be given to ourselves'

But I doubt there's any lady/man out there who wants to get into a relationship with us if we have such 'contract'

So Bangers, let's be more careful when we choose a lady to become our life partner coz I'm also still single, but I'm 26 now

 

[Bangers]

Thanks all.

I'm not concerned about my life partner, or even my future wife (if Im to be soo lucky). What I'm curious about are the ones who will be part of my life in the next 5 or so years who "won't make it" so to speak. They may be short (no problems) but what if they breach the 6 month barrier where it's possible based on the living situation we can be considered to be in a de-facto relationship. This is where my curiousity came in to ask the question.

I'm not one to talk about money so in those 6 months chances are my girlfriend wouldn't even know about my assets.

Matt

 

[alexlee]

Thanks all.

I'm not concerned about my life partner, or even my future wife (if Im to be soo lucky). What I'm curious about are the ones who will be part of my life in the next 5 or so years who "won't make it" so to speak. They may be short (no problems) but what if they breach the 6 month barrier where it's possible based on the living situation we can be considered to be in a de-facto relationship. This is where my curiousity came in to ask the question.

I'm not one to talk about money so in those 6 months chances are my girlfriend wouldn't even know about my assets.

Matt

1) Don't tell your girlfriends about your IPs until you think she is the one.

2) Don't live together. Just keep separate places and visit each other often.
Alex

 

[XBenX]

That has its own problems. Harder to make decisions: a democracy of two doesn't work very well.
Alex

I dont propose that people actually check out the assets of their prospective partners. Just a tongue and cheek post.

That would not be a relationship, unless you are Anna Nicole....

 

[natmarie73]

Why would you move in with someone who you don't intend to marry or at least love enough to consider being with them for the rest of your life? If you are that worried about "the ones that don't make it", then maintain seperate residences until you are satisfied she is the one for you. I don't understand why you would invest the time and energy of living with someone who is unsuitable.

Cheers
Nat

 

[Merovingian]

Or to be safe, if you were living with your partner, perhaps in 5 month intervals, you move out on your own for a month, and then move back in again for another 5 months, until you're sure they're the one for you.

 

[Chev]

Where is this 6 month period from??