Protect Assets

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From: Anonymous


Please advise.

I am single (27) and own 5 investment properties in Melbourne with very little debt.
The problem is that I'm thinking of getting
married and I want to now the best way to protect my assets for the worst case scenario (Getting divorced and the wife want's half my assets).
I have heard of Pre-Nuptials and Family Trusts.
Once I have some feedback from users of the the Forum I will be consulting a solicitor.
 
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Reply: 1
From: Rixter ®


If your problem is "Getting Married" as you say, I ask you to ask yourself the following question ( as you should already know the answer as you should have asked yourself the same thing long before now....) "Why is it you are getting married?"
Happy Investing,
Rixter :)
 
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Reply: 1.1
From: Jeremy Laws


Crap Rixter! Anon is asking a very good question, and I would like to know the answer also. Unfortunately the best suggestion I have had so far is to ask said creature to marry you. Once engaged you can ask them to sign a prenup which limits the losses. This is not perfect, but the best I have heard. I know a lot of girls (and one guy) who's job is living and marrying their 'employers' Its not right, and I don't know the answer but you HAVE to be prepared.
 
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Reply: 1.1.1
From: Jeremy Laws


BTW anon,
I don't want to scare you but 50% loss of assets is a BEST case scenario in almost every case. The worst I know of was 140% loss of assets. Average in my industry is 80-90%
 
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Reply: 1.1.1.1
From: Even Steven


As far as I know the divorce courts ignore pre nuptial agreements and divide the assets 50/50 if there are no children. The more children, the more the wife gets. A friend of mine has a friend who married a woman from the Phillipines who already had children. He brought her and her children out to Australia. When they got divorced a year later she got his house which he had inherited from his parents leaving him with nothing. Sick, isn't it. The bottom line is the Government does not want to have to support the wife and her children so they give her the assets.
Steve
 
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Sim

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Reply: 1.1.1.1.1
From: Sim' Hampel


Okay, how's this for a suggestion (please note tongue firmly placed in cheek)...

Sell your IPs... take whatever profit you make (you WILL make a profit from the sale I hope)... and spend it on a huge diamond ring (hate the things myself, but I believe most women adore them), a massive wedding, and an incredible honeymoon.

Then start your marriage with no assets and on equal footings with your new wife (check that she has no assets too !), then everything you do will be done together - so it will only feel fair to split it with her if you do go separate ways.

So... can anyone come up with some more serious suggestions ?

 
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Reply: 1.1.1.1.1.1
From: Dale Gatherum-Goss


Hi

I wasn't going to reply to this post because the anonymous posting, but . . . I hate to see people screwed by the system.

Personally, I believe in the sanctity of marriage "for better or worse" and so I'm prepared to lose the lot for the love of a good woman who is worth it.

I'll stop there before you start to heave!

However, if this is not your bag, you might like to consider some of Lance Spicer's books from Trident press. He explains how you can hide your assets from even your spouse if you are prepared to pay the costs involved.

Trusts are good if you have people you can trust to act as figureheads so that your wife does not appreciate your involvement unless you choose for her to know. However, the costs of stamp duty and capital gains tax on transferring your existing assets to the trust might be prohibitive.

Lastly, I would talk to a good solicitor (if there is such an animal) who specializes in pre nuptial agreements and family law.

Good luck

Dale
 
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Reply: 1.1.1.1.1.1.1
From: Sergey Golovin


"He explains how you can hide your assets from even your spouse if you are prepared to pay the costs involved."

May be you can set up trust; start buying into trust by using equities from your current IP's, build up number of IP's in that trust. Once you have enough IP's in that structure, start selling other once openly, keep one or two in "old structure" to keep your partner happy. If something did happen (hopefully nothing will) then you could sell "old" once and split'm one each or something similar.

Good luck.

Serge.
 
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Reply: 1.1.1.1.1.1.2
From: Jeremy Laws


1) The law does take Pre Nups into account. It has only recently happened.
2) Off shore assets help (Lance Spicer is NOT the grail - his philosophy is based on not telling anyone anything, and hoping they don't find out. Problem is Family law can take into account _perceived_ assets. It's what the mangey good for nothing spouse (and it's lawyer) THINK you have, not what is on your asset list, that is divided.
3) Not so silly Sim! One story that I have heard work twice is this. I will use W - Wife and H - Husband to illustrate. Obviously the roles may be reversed.

W - 'I want a divorce'
H - 'Well as I have only worked for the past XXX years for you and the kids I think we should sell all our assets, I will leave my high paying job and go and sit on a beach in Cairns. I have worked out that we should be able to live very comfortably on $22,000 a year - I have centrelink forms for you to fill out for public housing if you want to live in a capital city. Obviously we will have to make some changes, but since you feel it is necessary I think it is the best plan.'

I know for a fact that this plan has worked in two instances. In both cases the lifestyle threat was used successfully to keep the marriage together.
 
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Reply: 1.1.1.1.1.1.2.1
From: Michele B


Well here's a subject that'll get most of us going. Trouble is, the world is full of losers and users, male and female, who want it all the easy way. But really they're not too hard to spot - the question is whether you really care very much when passion has you in its grip. Since there's some truth in the old adage about marrying in haste, maybe taking a LOT longer to commit will take care of part of the problem. Eventually the sane side of you recognises what's genuine and what isn't.

On the other hand, when you do make that commitment and presumably form a team of some sort, then it's fair and reasonable that assets be divided up fairly, esp when kids are involved. Statistically, it seems that men are better equipped to make good their losses post separation than are women with children, though in practice we know this isn't always true. Divorce really does spell financial ruin for many, at least in terms we on this forum understand.

So what’s the answer? For most people it's just one of those 'well hopefully it won't happen to me' things. But for many on this forum who have built a substantial asset base on their own rather than as a team/couple, this really is a traumatic issue. Is a comfortable but lonely life punctuated by 6 month relationships really the better option? Sounds vaguely Scrooge-like to me and a strategy which is strictly for the risk averse. Choosing a partner whose level of affluence corresponds closely with your own might also work but isn’t going to be easy to achieve, given you’ll also be hoping for complementary values, outlook, interests plus some sizzling chemistry. Unless as Sim said, you both start with nothing.

I really don’t believe anyone in a solid relationship is seriously going to keep their assets hidden from their partner. Seems to me it’s like any investment decision – you weigh the advantages against the risks - you have a happy fulfilling relationship with the possibility of a breakup down the track, but you minimise the risk by choosing well. And if you do separate, you try to do it amicably and fairly because you still have respect for your partner and you love your kids.

And anyway, how many shoes can you wear at once?? Does it really matter if you end up with only half a million? Or only one IP? Or just your ability to get up and get going again? Plenty of people on this forum have been seriously wiped out by circumstance and are on their way back. I‘m now in half reasonable shape myself after virtual bankruptcy at age 35. It’s all a matter of attitude. And guess what? When you get older all those boring homilies your parents used to spout start to make sense – look after your health – it’s only money – life’s a journey, not a destination – these all start to make LOTS of sense.

Maybe what I’m trying to say is that it’s always worth taking the chance to be happy. And relating to other people, and especially to someone special, is fundamental to finding happiness. Dollars just relieve stress.


Michele
 
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Reply: 1.1.1.1.1.1.2.1.1
From: Jeremy Laws


I think you should look upon 6 month relationships more along the lines of Mortgage Insurance, not Scrooge-like.

But Michele to be wiped out at 35 financially and then be back in a reasonable state (how old are you now? 68?) 33 years later is not what all of us want.

I do think in general terms your post meant a lot to a lot of us
 
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Reply: 1.1.1.1.1.1.2.1.1.1
From: Rixter ®


OH Crap Jeremy Laws,
Sounds like you may have deep rooted problem that cuts too close to the bone!
Happy Investing,
Rixter :)
 
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Reply: 1.1.1.1.1.1.2.1.1.1.1
From: Jeremy Laws


Rixter,
The only problem I have that is deep rooted is with an idiot in Florida who owes me $50k and a council that won't let me have a boatshed. I don't think anyone here can claim responsibility for any of these issues! I can cope with anything else!!
 
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Reply: 1.1.1.1.1.1.2.1.1.1.1.1
From: B M




anon
Been there done that.Very similar circumstances to me actually.There’s a heap of rules in the family law act but the bottom line is the government does not want to see the aftermath of your failed relationship costing them anything so they will always slide a generous portion of your wealth no matter how you have it structured,to the person they see as disadvantaged, usually the ex wife with the kids.The sad thing here is fairness goes out the window and most divorced men really get done over unfairly so your concern is very justified.
Pre nups can work if they are worded correctly and funnily enough generous to the other partner.
I have heard of assets hidden in family trusts being ferreted out and counted as assets towards a divorce settlement.I believe that the government has seen every trick in the book regarding hiding assets and takes counter action.Ultimately it’s the judges decision in court and if he suspects you have cunningly hidden assets he might declare that joint house you own to now belong to her to cater for the confusion.Also during the court case if they prove that you hid assets you’re in big trouble too.
So in conclusion what's the real answer? You need to choose your partner wisely .Do you share the same goals? Do you have the same desires? Are you a careful saver and she a spender because that’s a recipe for disaster on the road to wealth creation. Forget the show and promises from the other partner. Forget trying to change them too. Look at the past .Are you fronting up to the altar with 5 properties and her with absolutely nothing? Sorry,but that would ring the alarm bells for me. Finding the right partner is absolutely crucial to personal and financial success...believe me.
 
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Reply: 1.1.1.1.1.1.2.2
From: Dale Gatherum-Goss


Hi Jeremy!

I agree with your comments about Lance Spicer, but, the benefit for most of us is that he has actually written books that the common man can read and follow.

Even in my role, I find very little useful and practical information on this topic and nothing that I can suggest to let people to read.

If you know of other authors, I would be appreciative if you could let me know.

Thanks and have a great weekend!

Dale
 
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Sim

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Reply: 1.1.1.1.1.1.2.1.1.1.1.1.1
From: Sim' Hampel


*sigh* whatever happened to just falling in love ?

 
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Reply: 1.1.1.1.1.1.2.2.1.1
From: Michael G


Hi all,

What are we discussing here?

Asset Protection:

as·set (st)
n.
A useful or valuable quality, person, or thing; an advantage or resource: proved herself an asset to the company.
A valuable item that is owned.

pro·tec·tion (pr-tkshn)
n.

The act of protecting.
The condition of being protected.
One that protects.

To me, its all about insurance. We insure our car, house, contents, even our income. So why not our assets.

Let me put an interesting definition on the idea of "assets". What if we were to define our friend's 5 properties as his "income stream"?

Don't we have income-protection insurance so if we are incapacitated, and are no longer able to work, we can still recieve a form of income?

What if we view the cost of maintaining an asset protection structure as a "premium" for our "income protection structure".

In fact I don't care who get's what assets that were created DURING the relationship, in fact the other party could take the lot for I care, but why be penalised to start from SCRATCH? Where's the fairness in that?

Things don't always work out, but should our friend here be punished if they make a mistake for falling in love with the wrong person?

We're not just talking money here?, Our friend has sacrificed TIME and life's opportunities to getting where he is now.

Let's imagine a worst case scenario. Our friend spends 5 years of his life saving money and doing research to buy these homes. He made choices not to go out or have holidays, so that he could build up a future.

Where on the other hand let's say his wife to be, a high income earner has spent the last five years spending her generous income travelling the world and salary sacrificing on nice sports cars, and buying nice clothes.

Then that day comes, they meet and fall in love. They move in and have a child. She's quits work and our friend here continues to build up assets.

Then a few years later things go sour. They decide to break up. Of course all those "things" his wife had bought (clothes, cars, holidays) are now worth nothing and will need money to live because she got the child.

During the relationship, our friend built up some assets between them, which would support her and the child comfortably, in they were middle income earners. But his wife has always been acustom to the good life. She enjoyed herself before her marriage and it will be a cold day in hell when she has to let that go.

She eye's our friends properties that he had before they met and they should do nicely. If she sells them there will be enough cash for her to live nicely at least for a couple of years while she gets back on her feet.

What about our friend?. Well tough, he starts from scratch, and while we're at it, did I mention that his now paying support, so that means he'll have less to work with oh and while we're at it, he's older too, not too many years left to start over and have some time left later to enjoy his labour.

Just one last point. I've noticed a few posts are talking about, "love" "commitments", etc. Ok, that's all well and good while in the relationship. But we're not talking about the time during the relationship. We're discussing after that. But we're all talking about love here right? Where's the love then?

in·sur·ance (n-shrns)
n.

Coverage by a contract binding a party to indemnify another against specified loss in return for premiums paid.

Michael G :)
 
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Reply: 1.1.1.1.1.1.2.2.1.1.1
From: Jeremy Laws


Micheal,
Are you suggesting a loss of income style insurance to protect income streams in the event of disaster, are these possible?
 
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Reply: 1.1.1.1.1.1.2.2.1.1.1.1
From: Sergey Golovin


That kind of insurance is probably possible but how much would it cost?
As I already mentioned earlier - it is possible to get life insurance if you are let say war correspondent and have to go in to the war zone, but it cost absolute fortune and not that easy to renew.

In regards to the "structure" - it probably could be set up in the other country, while “flamboyant” partner is talking about Your savings.

May be you do have to find right partner, I do not know.

Partner can be almost like property - negatively "geared", neutrally, positively "geared"? Meaning - it will eat you alive; understand what you do, but do not want or do not know how to help, or understand and will help.

The other side of the coin, once you are married, is to protect that asset against your self.

Serge.
 
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