Safe as houses?
- Thread starter IPSpirit
- Start date
Personal: you can be sued or a spouse (or defacto) can have a share
Company: as a Director you can be sued
Trusts: the family court has "seen thru" to get to the assets, but probably the best asset protection of the 3.
Company: as a Director you can be sued
Trusts: the family court has "seen thru" to get to the assets, but probably the best asset protection of the 3.
I agree- a pre nup or mortgage the asset to the hilt with a 3rd party (parents or trustworthy siblings)
Yes
What if the other members of the trust disagree with that? Is pre nup the only other option?[/QUOTE]
Yes. If you divorce, you and your assets will be dealt with under the Family Law Act. These days it's almost always 50-50 or 60-40 (if kids involved). Marriage is a financial transaction. You may be able to transact out of that with a pre-nup but I'm not aware of how these are being enforced since they were allowed.
Go to a good accountant who specialised in asset protection, like Chan and Naylor.
Do not buy any property in your own name - even if is your own principal place of residence. If you are ever sued you will lose your house, unless it is protected with internal debt.
Set up a trust structure, like a discretionary trust, with a NON TRADING $2 shelf company as trustee for the trust. You will be director, appointor and beneficiary of the trust. So long as the the company is not a trading company, you as the director can not be sued for trading insolvently.
As appointor and director you have complete control over your assets in the trust.
Go see someone who specialises in setting up these trust structures, it costs good money and is a waste of time if it is set up incorrectly.
MAKE SURE THE SETTLOR (WHO EVER SETS UP THE TRUST FOR YOU) DOES NOT GET PAID FOR SETTING UP THE TRUST. IF THERE IS A SMALL FEE THAT YOU NEED TO SETTLE THE TRUST, MAKE SURE THAT AMOUNT IS CLEARLY LABELLED AS A 'GIFT' - THIS IS VERY IMPORTANT, IF YOU DONT DO THIS AND THE SETTLOR IS INVOICED/RECIPTED FOR AS A PAYMENT, THE TRUST WILL BE INVALID AND YES ANYONE SUING YOU CAN STILL OVERRIDE THE TRUST STRUCTURE THROUGH THIS LOOPHOLE.
Rachel.
Do not buy any property in your own name - even if is your own principal place of residence. If you are ever sued you will lose your house, unless it is protected with internal debt.
Set up a trust structure, like a discretionary trust, with a NON TRADING $2 shelf company as trustee for the trust. You will be director, appointor and beneficiary of the trust. So long as the the company is not a trading company, you as the director can not be sued for trading insolvently.
As appointor and director you have complete control over your assets in the trust.
Go see someone who specialises in setting up these trust structures, it costs good money and is a waste of time if it is set up incorrectly.
MAKE SURE THE SETTLOR (WHO EVER SETS UP THE TRUST FOR YOU) DOES NOT GET PAID FOR SETTING UP THE TRUST. IF THERE IS A SMALL FEE THAT YOU NEED TO SETTLE THE TRUST, MAKE SURE THAT AMOUNT IS CLEARLY LABELLED AS A 'GIFT' - THIS IS VERY IMPORTANT, IF YOU DONT DO THIS AND THE SETTLOR IS INVOICED/RECIPTED FOR AS A PAYMENT, THE TRUST WILL BE INVALID AND YES ANYONE SUING YOU CAN STILL OVERRIDE THE TRUST STRUCTURE THROUGH THIS LOOPHOLE.
Rachel.
I have also heard that if you enter into a defacto relationship, and you allow that person to contribute in any way to payments towards the mortage, maintenance, bills or upkeep of the property - you have just granted them entitlement to part of that property if you are ever to split up. Bad move... If I were you I would avoid that situation entirely by speaking to a good lawyer and get yourself informed prior to entering into any relationship to protect your assets. Wise to do that before they can get a hold of you.
Rachel
Rachel
hubby and i had a "letter of agreement" drawn up in the days before prenups were accepted in australia. we'd both been bitten so had solictor draw up papers specifying exactly what each party bought into the relationship and it's cash value (didn't worry about furniture and stuff - just the cash, cars, property etc).
the agreement was drawn up that if the relationship ended that each party would take out the cash value they bought in and the balance would be split 50/50.
12 years later that inital cash value is so miniscule in the current asset pool that the agreement really means very little now - but it was great peace of mind at the time.
i agree - a prenup is the way to go, and any serious partner wouldn't blink at signing it.
the agreement was drawn up that if the relationship ended that each party would take out the cash value they bought in and the balance would be split 50/50.
12 years later that inital cash value is so miniscule in the current asset pool that the agreement really means very little now - but it was great peace of mind at the time.
i agree - a prenup is the way to go, and any serious partner wouldn't blink at signing it.
Serious, long term relationships DO involve some sharing of money, you know......
