What I've been told is a trust can protect your assets as you do not own the property - the trust does. So for example, if you get sued and go bankrupt, the bank can't take your IP because you don't own it, it's in the trust which is controlled by a 'party'. Please correct me if I'm wrong as I'm still learning also
This is not really correct.
A trust can't own property. A trust needs a trustee and it is the trustee that owns the property. The trustee could be you, a person, or a company (or both). But the trustee only owns the property legally - the true owners are beneficiaries.
The easiest way to understand this, I think, is with children's bank accounts. A 2 year old can't operate an account, so the mum may open an account for the kid. The mum would be trustee and legal owner with her name on the account, but it is not her money as it really belongs to the kid who is the beneficiary.
If someone goes bankrupt, their assets (or whats left of them) go to a trustee in bankruptcy who then sells them to pay out creditors. Assets held on trust are not your assets and the Bankruptcy Act says that the they are not available for creditors. That is, trust assets are not considered property and won't be able to be sold.
So if the mum from the eg above goes bankrupt, her kids account will not be able to be touched by the trustee in bankruptcy.
So far so good, but what if the kid grows up and becomes 18 and she goes bankrupt - in this case the money is in the mum's name, but the kids is the ultimate owner so it will be the kids property and it will become available to creditors.
The way around this is to make sure your trust is a discretionary trust (DT). With a DT the trustee owns the property, but the true owners, the beneficiaries are a large group of people. None of these people can be considered owners as the trustee has discretion (depending on the deed) on who to give income to each year. That way no one person has a claim, no one can demand money (unlike the kid in the above example, which would be a bare trust). So if a beneficiary of a DT were to go bankrupt the assets of a DT could not be taken as they have no claim on those assets.
This is well know and has been abused a fair bit, so over the years there have been amendments to the Bankrupcty Act etc so that in some instances assets held in trust can be attacked.
One is if you were to sell or gift or divest your assets to a trust (or anyone) just before you become bankrupt. In many instances these transactions can be reversed, especially if the transfer was done at under market value, or done with the intention of defeating creditors. This also includes gifting money to your trust or anyone's trust.
Another way trusts can be attacked is if you run or offer services to a trust and the trust does not pay you for those services.
Mortgaging to a company or your trust can also be reversed as can the use of options, leases, contracts etc.
So asset protection is not as simple as buying a property in a trust - you need to carefully plan how the trust is going to be run, who is going to operate it, who is going to gift or lend money to it and how you are going to do this.
Then you have to consider all the other aspects of operating a trust such as the tax side - especially if there are losses. The state revenue taxes aspect such as stamp duty and land tax as well as all the legal issues such as trustee duties and obligations and even the corporations act stuff if you are operating a company as trustee.