Is it necessary for you to apply asset protection strategies?
If you’re not a doctor, a business owner, a corporate executive or someone with plenty of assets, you might not think so. But the fact is anyone who’s accumulated wealth should consider asset protection solutions.
There are many ways by which your hard-earned wealth can be taken from you, and not just through commercial litigation. Filing for bankruptcy, getting a divorce, and being on the defensive end of a civil lawsuit are just some of the ways you could lose your assets. Those who suddenly come upon a substantial inheritance are also prone to losing it almost as quickly as they gain it, through lawsuits filed by those who wish to make some of this new wealth their own.
So how can you shield yourself from such dangers? Here are four basic asset protection strategies in Sydney, Brisbane, Melbourne, Perth and Adelaide residents can apply.
Buy umbrella liability insurance
Umbrella liability insurance can be bought from home and auto insurance providers and gives you added protection against personal-injury claims. When buying an umbrella policy, take note of the inclusions and make sure that you are protected from all types of claims. If you are to come upon an inheritance, it’s best to do this ahead of time and make sure that your coverage amounts to a value that is at least equal to your net-worth.
Consider separate accounts
Some would advise transferring assets to your spouse’s name to keep them safe, but this can have the opposite effect should you end up in divorce. The wiser choice, in this case, would be to have separate accounts. This ensures that your assets stay with you and your next of kin despite a divorce.
The same goes for joint accounts with business partners or other connections. These can be at risk should the joint owner incur a tax lien or lawsuit judgment. But if it is absolutely necessary to have a joint account, at least keep the balance to a minimum.
Create a business entity
If you own a small business or rental property make sure to create a formal business structure (Pty. Ltd. or Propriety Limited Company). By forming this entity, your personal assets are protected against business lawsuits, which can now only target the assets of the entity.
Establish an asset protection trust
Trusts are asset protection solutions that have been used for years. They protect your wealth from being taken from you in the event of a lawsuit. Since you don’t own the assets but merely control them through the trust, you cannot lose them.
It’s important to choose the right trusts and strategies that are suited for your specific needs and situation and to this end, you can ask assistance from a reliable business accountant, such as those of Chan & Naylor.
At Chan & Naylor, we can provide you with not only trusted, expert and proven advice on how to protect your assets, we also offer the best asset protection and investment property strategies.
Don’t wait for creditors to come knocking at your door. Apply these asset protection solutions and ask expert advice from those who know asset protection best, the experienced specialists of Chan & Naylor. Call us today at 1300 250 122.
Disclaimer: This article contains general information; before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs. Click for more detail regarding this disclaimer.
Contact a Chan & Naylor accountant in your area, and we’ll be more than happy to help you to protect your assets.
Aside from asset protection, have a look at our other accounting and advisory services that we do to help you achieve greater success.
Chan & Naylor Group has nationwide offices in North Sydney, South West Sydney, Sydney, Pymble and Parramatta in New South Wales, Melbourne, Moonee Ponds and Hawthorn in Victoria, Brisbane and Capalaba in Queensland, and East Perth in Western Australia that can help you to protect your assets as well as any tax accounting enquiry that you may have. Contact us today.