Wills, Estates and Wealth Protection

Wills, Estates & Wealth Protection

Most people have assets. These assets might be in the form of a family home, a car, a business (such as a professional practice), a share portfolio, investment real estate, valuable artworks, and so on. Most people who are fortunate enough to have a significant portfolio of valuable assets that comprise their personal wealth, need a way to protect this wealth from risk.

Wealth protection planning is a process by which the assets that comprise a person’s personal wealth, whether these assets comprise personal assets, business assets or other investments, are organised so as to protect them against risk. At Stacks/The Law Firm we offer a unique and personalised service in Wealth Protection. Your enquiry or matter will be handled with confidence, discretion and a specialist knowledge gained from years of working exclusively in this field. We work together with our clients with the aim of seeking quick and cost effective resolutions.

The Wealth Protection User Group has been established across all of the Stacks/The law Firm offices. This means that wealth protection specialists from 20 offices in NSW and QLD can regularly come together via conference calls and face-to-face meetings to share common precedents, pool resources and collectively problem solve. This is a real benefit to individual clients, who receive a consistently high level of service.

To what risks are wealth protection strategies directed?

We live in an increasingly litigious society. Litigators are becoming more and more aggressive. In fact, Australia is recognised as the second most litigious country in the world (the most litigious, of course, being the United States of America). People can become defendants in law suits in which substantial damages are sought against them through no fault of their own. Quite often, insurance is either unavailable, or inadequate. It is not uncommon for the cost of defending a claim, let alone the cost of satisfying the claim if it is successful, to be financially crippling.

Further, Australia is among the most highly regulated countries in the world, with virtually all business activity being the subject of state and/or federal government regulation of one kind or another. Some regulation is of such a degree of complexity that maintaining total compliance at all times is virtually impossible. The penalties imposed for failing to comply with regulations can also be financially crippling.

Apart from these obvious risks, a person’s wealth can be placed in jeopardy from other risks, such as:-

Claims made by a former spouse, or de facto partner, following a relationship breakdown.
Claims made by disgruntled business associates or employees.
Claims arising out of a person suffering a serious illness.

Risks such as these can arise out of circumstances that are neither foreseeable, nor involving illegal or self-destructive conduct. They can arise out of the everyday activities of people going about their business.

How does a person know if they need wealth protection?

It is prudent for everyone to have strategies in place designed to protect their wealth. However, there are some people who are more obviously in need of wealth protection strategies than others. These people include:-

The very wealthy. People who are financially well off are generally the most common group of people who need wealth protection strategies to be in place to protect their wealth.
Those in the public eye who have some degree of celebrity status. Often, people such as these are seen as prime targets for overzealous litigators and regulators.
People who have a concern or suspicion that they may face some form of legal, financial or even medical difficulty in the not too distant future.
People who own a business, or who are engaged in a professional occupation. Any business owner or professional practitioner is, whether they like it or not, at risk of being sued.

We all know that you can’t take your wealth with you when you die. Wealth protection strategies are designed to prevent others taking your wealth from you while you are still alive.

When should wealth protection strategies be considered?

In order to be successful, wealth protection planning must be a proactive exercise, not a reactive exercise. This means that wealth protection strategies must be developed and implemented before any of the risks discussed above actually arise. Generally, legislation (such as the Bankruptcy Act) will enable strategies to be challenged, and be liable to be set aside, if those strategies are implemented after a risk has arisen.

What are some examples of successful wealth protection strategies?

Importantly, there is no one size fits all wealth protection strategy. Each person’s particular circumstances need to be carefully reviewed, and a wealth protection strategy developed that is appropriate for those circumstances.

However, here are some examples of strategies that often form part of a wealth protection plan:-

Using companies and trusts to quarantine assets that involve an inherent degree of risk.
Ensuring that active assets (such as a business) and passive assets (such as a share portfolio, or investment real estate) are owned by different entities.
Giving inherited wealth to your beneficiaries, and receiving inherited wealth from your benefactors, through testamentary trusts.
Skilful use of debt and securities, particularly debt and securities involving companies and trusts in which the person to whom the strategy relates has an interest.
Structuring the appointment of company directorships within a family group to limit the exposure of that family group to risk arising out of directors’ liabilities.
Strategic use of superannuation and insurance.
Developing agreements to deal with the orderly succession of business ownership following critical events such as death, disability and voluntary retirement.

These examples are but a few of the possible strategies available for use in a wealth protection plan.

Nearest Stacks Offices:

The firms listed below have an in-house specialist in this area.

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