Asset protection is putting in place a set of safeguards and strategies to protect your personal and business assets. As soon as you buy your first car, you are already putting asset protection plans in place without consciously knowing you are doing so. As your assets and wealth grow over your life, this review will only increase on a larger and more thoughtful scale. Although asset protection starts at the purchase of the asset, it is important to constantly review current asset protection plans for both your current investments and future asset goals.
Appropriately insuring your assets is one of the most inexpensive ways to protect yourself, your investments or your business. An insurance broker is a great resource who can assist in guiding you on your insurance needs.
Insuring your assets is an easy way to protect the assets you have worked hard to acquire and most commonly include:
Insuring your business is a must under any structure and most commonly include:
Regularly reviewing your business structure is extremely important, including who or what is going to hold your assets. There are a variety of structures which can be used when considering asset protection.
A trust is a relationship between a person or an organisation (the trustee) who is responsible for holding assets for the benefit of other people (the beneficiaries). It’s a great way to manage tax and protect assets. The main benefits are:
A company is a separate legal entity which means it owns business assets separate from the director or shareholders. The main benefits include:
Reviewing your structure could be as simple as deciding which family member should hold personal assets such as the family home or your investment property. As a sole trader is not protected with the same limited liability as a company, this may factor into your decision when deciding which family member should purchase the next large investment.
3. Estate Planning
As soon as you start to acquire assets, it is important to think about protecting them. As a business person or a home owner, it is important to plan for the future once these investments have been acquired no matter your age. A lawyer is the best professional to talk to when creating a succession or estate plan however it is important to also involve a trusted business adviser in these discussions. One who is familiar with your business, your circumstances and can assist in explaining current structures.
Formulating a strategy for asset protection should be included as part of your overall business and financial planning. A good place to start is considering the above strategies so you can determine what is relevant for your situation. Are there things you can do on your own? What areas do you know you need assistance with?
Protecting your assets can often be as simple as reviewing your current business structure, but it is important to review the potential costs or tax impacts of changing your structure before moving forward with any changes.
Reaching out to discuss your options with a trusted business adviser, lawyer or insurance broker can help to clear a path forward so you know exactly where things stand and what is required.
If you are currently looking for a business adviser or accountant to assist you and your business, please make sure you talk with us to gain some clear direction. Our team at BLG Business Advisers are Wollongong Accountants who service right around Australia. There is no cost or commitment involved in an initial chat with us, which leaves you free to decide if we are the right fit for you.
Whatever you decide we wish you and your business every success!