Protecting your assets is more important now than ever before, especially with a rise in creditors and lawsuits taking an unnecessary toll on the finances of individuals across Australia. Let’s take a look at how you could better safeguard your resources.
Having the right insurance policies
In this day and age, liability insurance is a great way to protect your assets if the need to pay compensation arises. Lawsuits are filed more commonly now – and for a range of reasons – so this event is increasingly more likely to occur than you may think.
You will have the ability to opt for three main types of cover depending on your needs; public liability insurance, product liability insurance and professional indemnity insurance, so be sure to consult a financial adviser (or even your insurance broker) if you believe that you may benefit from this type of cover.
Business and personal assets may benefit from being separated, especially when both a business and family home are held in the same name. In these instances, both assets are likely to be at risk from bankruptcy and litigation procedures, should they arise.
A good way to protect your personal equity is to delegate majority ownership to your spouse (or a responsible sibling), if they are not named as a business owner. You should aim to retain some interest however, to ensure that any decisions regarding the home in question aren’t dealt with without your permission.
Keeping your partner (or registered home-owner) separate from your business dealings can help to further secure the asset too, so don’t be tempted to have them guarantee any loans in yours or the businesses name.
Trustees in bankruptcy will take certain factors into account and transferring your home right before judgement could work against you – and they could reverse the transaction if they feel it necessary to do so.
Create a trust fund
A trust fund can work to protect your savings, as the process of creating one and delegating a lump sum can cause the money to be seen as separate from your finances. In simpler terms, putting money into a legal structure effectively makes the asset theirs, which can be beneficial during unwanted financial circumstances.
Delegating and structuring your current assets can work to protect your wealth should the worst happen, so seeking the correct professional financial advice is generally a smart move.