Protect Assets

[michaelg]

Reply: 1.1.1.1.1.1.2.2.1.1.1.2
From: Michael G


Jeremy,

I'm suggestion people should think of asset protection in terms of "income protection insurance", to the extent that your assets are your income.

How else does one get out of the rat race? by acquiring assets that generate passive income. Think of it as "passive income insurance".

As to whether such a policy exists or not?, I do not know. But for those of you out there that have good insurance brokers, it would be a great question to ask.

Imagine a "passive income insurance policy"

protects against;

- fire
- wind
- storm
- malicious damage
- malicious ex-spouses

(fine print) this policy is only valid if insured assets are held within a policy compliant struture.

Annual premium includes annual structure review.

Just a thought...

Michael G

 

[WebBoard]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3
From: Anonymous


Thanks for the feed back.

Michael G you are spot on.

When you have $1.3 Mil worth of I/P's and your partner comes into the marriage with nothing but love and that love runs out (a story we hear about quite often). She then decides to leave and asks for half the assets, after lets say 2 years of marriage. I have no objections to give her what we have both contributed in our years of marriage. But to take the assets prior to the wedding for which I worked hard for, I can't accept that. When the children come along I don't mind handing assets over because it's for the my kids, but to hand it over her prior to the kids so she can enjoy my wealth that's another story.

In life I have learnt to take the worst case scenario and protect yourself against it.

Rixter, if you want to part with 650K in
2 years that's your choice but I will protect mine in which ever way I can.

Thanks everyone, I'm off to the solicitors
with some great ideas.

 

[evensteven]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1
From: Even Steven


Great Post Michael G, and don't forget guy's - not only does the ex-wife walk away with between 50 and 100% of your financial assets, she walks away with the things you love most in your life - your children. So what's the answer? Choose very carefully, be prepared to lose everything and look after your wife with your life and hopefully, with God's help, you'll be a big winner and not a big loser.

 

[Mr. Fabulous]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1
From: Mark Laszczuk


Reading these posts makes me realise how lucky I am. I have a partner that is truly supportive. By supportive I mean we put her income away as savings and live on mine - an enormous sacrifice. Not only that, but we talk openly and honestly about the possibility of separation in the future (not that it's going to happen, but...) and how we're going to structure our assets so that we both come out winners in the end. Now how's that for love and compassion. Me think's this relationship is somewhat of a rarity and most couples out there are too busy worrying about whether the one is going to screw the other. How about trying a little trust on for size people (no pun intended)?

Mark
'no hat, some cattle'

 

[michaelg]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1
From: Michael G


Mark,

That's great to see, but its possible that in some cases...

1) the mention of money, makes the spouse irritable, or angry (because they don't or do not want to understand)

2) the mention of sacrificies is not an options with some (prefers instant gratification)

3) the mention of seperation and structures would be seen as a prevention of getting more than their fair share.

But, I guess what I'm really saying is that, you're right Mark. Not only having the support but the UNDERSTANDING of what you're doing is great.

There's no reason why financial matters should be left to one of the spouses. Each can contributed equally, thus both would equally have the skills to manage on their own if need be.

I mean, imagine having a great relationship, and heaven forbid one passess away (the one that has been managing everything) leaving the other with this little empire and no skills with which to manage it?

That's why I think it would be equally important that each is involved as the other in building such things.

Besides, if the love does dissapear, at least each will have grown both emotionally and intelluctually from the time they have spent with each other. If that is the case, then nothing has been wasted. At least then each will be able to walk away with a better means to support themselves (that is if both have left the same skills).

Just a thought...

Michael G

 

[WebBoard]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1
From: Day Dreamer


Dear Anon,
Just transfer all the properties under my name and I will give you back half if the unfortunate happens.

 

[lawsjs]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1
From: Jeremy Laws


Another point I thought of. Using a successful investor as an example if anything happened. It would be financially better to give all the assets to the successful investor, as MG says they have the skills to run it, and will multiply it way beyond the level of the lesser skilled partner. Be difficult to get through but would be far more sensible. Sort of choice. Either lose the assets, or provide the cashflow. We know what we would choose.

 

[asy]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1
From: Asy .


OK, couldn't resist...

Seen on a bumper sticker...


I still miss my ex...

...but my aim is improving.


asy


"Don't forget what happened to the guy who suddenly got everything he ever wanted...
He lived happily ever after.
(Willy Wonka).

 

[Waverlybay]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.1
From: Waverly Bay


I noticed that some of the above posts have made references to careful selection of the spouse as being very important to wealth generation (or protection ?) pursuits.

I would agree with those sentiments and have found Chapter 6 of Thomas J Stanley's book "The Millionaire Mind" to be quite insightful on this topic. That chapter titled "Choice of Spouse" looks at the key qualities of a spouse that typical millionaires cite as being instrumental to their emotional, intellectual and financial well being.

But be warned : its only an observation of what other millionaires have done in the area of spouse selection - and therefore the comments in that chapter are not gospel or instructive on what makes a perfect marriage !

Ahhhh - if only choosing a spouse was as easy as going to a shopping mall with a nice checklist and selecting the desired item from the shelf ....(with the standard 1 year product warranty ).... ! !

Cheers

Waverly

 

[woody]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.1.1
From: Steve B


You could always do what Rod Stewart has suggested after his last divorce.
Find a woman you hate and give her a house.
Then learn from your mistakes and stay single for ever and ever amen.
Steve B.

 

[DaleGG]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2
From: Dale Gatherum-Goss


Hi Asy!

My favourite bumper sticker says:

"Divorce - the screwing you get for the screwing you got."

In context of this discussion, it seems somehow so appropriate!!

Dale

 

[asy]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2.1
From: Asy .


Dale,

Love it...

Where do I get one?

HAHAHAHAHAHAHAHAHA

asy



"Don't forget what happened to the guy who suddenly got everything he ever wanted...
He lived happily ever after.
(Willy Wonka).

 

[michele_b]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2.2
From: Michele B


Geeeez Dale

Good point Jeremy, though I can imagine your idea being legislated to death till it's sanitised and completely useless for its intended purpose. A bit like super.

Sim and Mark, what hopeless wonderful romantics you both are XXXX

Michael, somehow knew the computer you house in your head would find a new angle

.....interesting that it's the guys who have responded to this long thread. Lot of deep feeling on this subject obviously. And why not - anyone with practical experience of the Family Court these days knows it's often dangerously skewed in favour of women, sometimes even when they're not the receiving parent. Wasn't always so - my dad refused to pay maintenance for my brother and me in case my mum spent it on herself - we got thin instead!

While most posts here seem to agree that choice of partner has a lot to do with your chances of staying together, it's probably naive to assume the relationship is going to last a lifetime. In fact it's unlikely. Therefore assets accumulated during the relationship (yes, MG, hopefully by both partners so they are both financially adept) will be split fairly and according to whether there are children or not.

The question that started this thread and which still hasn't really been answered is how do you quarantine those assets each partner brings to the relationship? Most forum ppl are likely to have sufficient cashflow for child support purposes so the original assets could remain with their original owner. But specifically how?? Can anyone provide detailed information on the effectiveness of pre-nups? Has anyone used one? And is there some kind of etiquette attached to asking your beloved to sign one without getting flattened? I'm just asking on behalf of all frustrated blokes.

michele

 

[michaelg]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2.2.1
From: Michael G


Michele,

I've read alot on this subject (surprise, surprise) and so have friends of mine. Something that is very clear is that the law (i.e. the Judge who's court you happen to be in) pretty much has the power to dismantle anything you set up to ferret out any assets.

As previously said, one of Spicer's approach is to just not say anything, but then how do you enjoy the fruits of your labours?

One favoured system is to make it not worth going after.

This can be done by various means...

- have your structure set up in a region that requires the claimant to travel to that location to physically lodge the claim. In such cases the idea there is to have a flexible structure where that time you buy allows you to move.

In the above example "moving" means changing the trustee. Unfortunately my knowledge is all theorical, so i really don't know the details or pitfalls of this manuveour.

- another strategy is to booby trap an asset so that it when its touch it disables the claimant.

The theory of this is that is a claim is successful, the proceeds of that claim will then enable the person to fund further claims for the rest of your assetss. This is basically you putting more fuel on the fire.

The idea of booby trapping is to load an asset with debt and make it an enticing target. Then once it has been taken all that debt appears, which the claimant now has to pay. This would in theory disable them from makin further claims.

Recently on the forum, someone posted something about buying an asset where the stamp duty or land tax hadnt been paid. Once the person bought the property their debt had to be paid. Like this but nastier.

But these are all theories, the problem with asset protection is that really good stuff costs $$$ and is not worth it until your net worth is at least $500k

But the problem with this is that such structures usually require being set up early for it to be structually sounds, this is the catch 22 as it were.

The problem with seeking this sort of advice is that its expensive and if you try to save and get a poor advisor, it could cost you a fortune later.

So maybe what this forum needs is a template structure.

We work out say 3 portfolios that represent 3 levels of investing, with maybe 1 to 2 options. Then collectively have an advisor build for us a rock solid (or practical) asset protection structure, that performs to a general set of requirements.

Now the understanding would be that the template structure only works under specific conditions. e.g. only for future properties purchased under the structure. i.e. it cannot protect current properties. If you wanted to protect your currently portfolio you would need to seek independant advice on how to;

1) protect it seperately

2) work out how to move it into the structure effectively.

Our template structure would also detail;

- cost of setup
- cost of annual maintenance

Maybe the 3 levels of assets could be;

#1 - single person with 1-2 properties and share portfolio.

#2 - couple with family home. 2-5 Investment properties + 1 business

#3 - couple with family home. 10 properties. 2 Businesses. Stock portfolio + ???

The templates would then explain step by step;

- when to perform each step
- what contracts / documents are required
- what structures to create
- how each asset is placed into the structure
- how the structure is managed
- what the costs are and when they are paid.

Just thinking about the above. I don't think its going to come free so one possible theory would be, a group interested, would;

1) decide what the templates are
2) contract a panel of adviser/s to create the above
3) pay equally for the information

Just a thought...

Michael G

 

[lawsjs]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2.2.1.1
From: Jeremy Laws


MIcheal,
The booby trap idea I have half implemented in my will - I congratulate you! I think it is a superb idea for some of us to pursue a protection plan together. At least a rough guide. I have a superb lawyer who runs at about $500 hour from memory, but the best $1500 I have yet spent.
Michele
No doubt your Fathers scheme would appeal to all the WOmans Day and No Idea readers instead of things like Bai Lin Tea.

 

[michaelg]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2.2.1.1.1
From: Michael G


Jeremy,

Hmmm, I guess the process would be;

1. Determine who's interested (the more the merrier).

2. Agree by majority how many scenarios (the more the most it costs of course). 2-3 would be a good number (Basic, Intermediate, Advance)

3. Determine the scenario for each (potential portfolio make-up and social situation (whether married, single, kids, etc)

4. Get quote for # of hours it would take to create. Assume 10hrs per scenario for 3 = 30 hours.

5. Split the costs. People would pay under a JV agreement who's sole purpose was to obtain intellectual property (the structure info).

30 x $500/hr = $15,000

assume 10 people interested...

$15,000 / 10 = $1,500 for detailed GENERIC asset protection structure TEMPLATES.

Note: proposed structure would be usuable for new acquisitions, not necessarily for current assets.

Quote: may include options i.e.

- How into transfers a property/business/stock into the Basic/Intermediate/Advance structure.

The problem with this is that individual scenarios may complicate things. My thought would be to forget this extenstion to the idea, and allow individuals to seek independant advice (maybe using the same guy to provide private consulation).

Michael G

 

[lawsjs]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2.2.1.1.1.1
From: Jeremy Laws


Agree totally MIcheal. It would need updating as rules change, but I do think it could help a lot of people. (ME!) It would also be interesting to show a game plan to different lawyers to get a different slant on ideas. I would guess most of them would have a basic plan in their minds in any case, but I am a firm believer in getting this well sorted. As I said to a friend of mine 'You spend $2500 a YEAR insuring a $90k car (that is now worth 50 and you thing 5k as a ONE OFF fee is too expensive to insure $600k????'

 

[WebBoard]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2.2.1.1.1.1.1
From: Steve Piggott


OK this is how im set up. It may work for some , but for Anon it would mean some stamp duty costs to shift into the structure.
My asset holding facility is a Discretionary Trust which is the holder of 1 unit in a Unit Trust. The trustee of the Unit Trust is a Company that is merely a trading facility.
This structure cost me less than $1500.00 but will save me a fortune if ever the X decides she wants to go gold digging. Yes i've divorced once and its taken me 3 yrs to be in a much better financial position.
My position is simple ... I own nothing in my name. Yet I control a vast asset and wealth base. This is asset protection. Most people who know their marriage/relationship is failing decide then to shift assets around and of course when it comes to the family court they will make their decisions retrospective if it can be proven the partner was trying to secure assets away from the spouse. If however you began your investment portfolio in this structure prior to a marriage then there is certain safety of your assets. If you wish to invest with your spouse create a new investment structure and this will entitle him/her to the designated portion as dictated by the structure. Keep your personal income to a minimum this will also reduce child maintenance (you can always contribute to the child voluntarily ). The family court has tried to extract more than they could legally acquire from myself.... so unless they wish to re-write corporate law which will affect the wealthy of this nation I am as safe as I can possibly be.
Assume the worst then plan for it!
Nothing offends me more than when a good man who has provided all he could goes down to a greedy lawyer who is pushing a disturbed and disgruntled wife. ( been there done that )
Always have an exit strategy for investing and your life is your biggest investment!

Happy Investing Neb

 

[yuch.]

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2.2.1.1.1.2
From: Yuch .


Hi all,

I've read what everyone else has to say.

With anon's situation, I think asset protection is absolutely essential. And I believe it's a sensible thing to do coz I suppose you just can't tell if the girl is really in love with you or your assets...

I think a marriage/relationship is an investment in your happiness and it's just like any other investments, there are always risks associated with it. You can only do your best to minimise your risks. And I think both choose well and an asset protection strategy help. If your scared of falling over, then ask yourself 'If I have to start all over again, would I be able to replicate it again?'. (This is your exit strategy)

If your answer to the above question is yes, then the next question is 'How does this girl add value to my life in the long term and vise verse?'. If you both add value to each other's life, then it's less likely that the love is gonna run out.

Then the rest is just management. Marriage is just like your rental properties, in which both you and your wife are the property managers. And it's up to you to make it work.

BTW, I am not married so I am not really in a position to answer this question. I've asked a very similar asset protection question to my best friends at work, Greg Mitchell, Matt Wilson and Peter Russell, and the above was what I got from them. I hope this helps.

Here I have also included a few questions I was being asked to think about:

Greg: If your making so much money but not married and no kids, what are you going to do with all those money when you die? I thought wealth is to pass on generations to generations.

Peter: Yes, trust structure sounds great, but a trust is all about 'TRUST'. How do you know that your trustee is trust worthy?

Matt: How do you add value to your partner's life? And how does he/she add value to your life?

Well, I am still thinking, don't have an answer yet. Nevertheless, I think they all have a point and I thought I will share this with all of you.

Regards
yuchun
~ The secret to success is to start from scratch and keep on scratching. ~

 

[Sim]

Protect Assets - Marriage Counselling 101

Reply: 1.1.1.1.1.1.2.2.1.1.1.3.1.1.1.1.1.1.2.2.1.1.1.2.1
From: Sim' Hampel


On 2/3/02 5:21:00 AM, Yuch C wrote:
>
>Then the rest is just
>management. Marriage is just
>like your rental properties,
>in which both you and your
>wife are the property
>managers. And it's up to you
>to make it work.

Yuch, I think this sums it up perfectly.

If you enter a relationship based on the assumption that it will last forever (and assuming that you actually want it to !), then your only solution is to MAKE it last forever. Do whatever it takes to ensure you are both happy and satisfied with each other. It's all up to YOU.

Just like you make sacrifices now in order to increase your wealth later, long lasting relationships are all about sacrifice.

Structures and legal contrivances are all well and good, but they are trying to "cure" something which surely would be better "prevented".

My advice ?

Look long and hard for that perfect person to spend the rest of your life with. Then never let them go. Make them deliriously happy (note that this should not require money... if it does, then something is seriously wrong).

Try this test. If you got married and then lost all your wealth. Would your spouse still be in love with you ? Would there be a reason for them to stay ? If not, why not ? What are you not personally doing for your relationship to ensure it's longevity ?

The more cynical amongst you will say "he's just a young naive fool".

Maybe... but given that the ABS states that the median duration of marriage to separation throughout the 80's and 90's was around 7 years, I already have more experience than most ;-)

I also have the advantage of advice from people who have been married far longer than I, and a common theme from the successful marriages I have witnessed is an assumption that marriage is forever and that there is mutual respect, trust, and self sacrifice required in order to ensure it's longevity.

Now if you are of the opinion that love and indeed marriage is not necessarily for ever... if you are a "realist" and acknowledge that it is quite possible or indeed likely that your marriage will not last... then you're on your own. Go find yourself a damned good lawyer... because if you expect it to fail, it most likely will.

Here endeth the lesson ;-)