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The top eight asset protection myths

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Myths about asset protection

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Myth No. 1: Asset protection is only for the rich

Answer: False

Consider this scenario: If you held a net worth of $5 million, you would not be as affected by a $1 million lawsuit
as someone else holding a net worth of just $1 million. The wealthier you are, the easier it is to pay the judgment
and carry on with life. Those with fewer assets could potentially lose everything, with bankruptcy the only way out.

Myth No. 2: I’m not a lawsuit target because I don’t own a business

Answer: False

NSW is the third most litigious state in the world. Litigation is becoming a new favorite pastime because it’s
easier to sue someone and win money than it is to earn it. No one is safe.

The only prerequisite for being a litigation target is owning assets of value to someone else. Those assets could
include a family home, investments, money in your bank account, or your business.

Myth No. 3: I don’t need asset protection because I have insurance

Answer: False

You cannot buy insurance as a hedge against every possible scenario.

There are limits to your coverage. For example, you may hold professional liability insurance to protect your
assets from lawsuits relating to your business activities. However, that insurance will not help you in the event
that you were sued due to someone being hurt in a car accident that was deemed your fault.

Myth No. 4: If you’re sued and don’t have asset protection, you can transfer your
assets to a family member

Answer: False

Transferring all of your assets to your spouse and/or children, especially after something has happened, will not
protect those assets from being seized in a lawsuit. The courts will simply follow the paper trail and consider your
family member a party holding those assets in trust for you.

Myth No. 5: I don’t have enough assets now, so I’m safe to look into
asset protection later

Answer: False

The time to set-up the basics for protecting your assets is right now. If you transfer your assets
into an asset protection structure down the road and your assets have grown significantly in value, you may become liable for
costly capital gains taxes and stamp duty.

Myth No. 6: Asset protection will cost me a fortune to implement

Answer: False

Setting up an asset protection structure is relatively inexpensive. What’s more expensive are the legal fees
associated with defending yourself in court. To make matters worse, in the event you
fall victim to a lawsuit, you lose not only financially but also psychologically.

Myth No. 7: I have a Proprietary Limited Company, so my assets are secure

Answer: False

Owning your business in a Pty Ltd company makes you a sitting duck for litigation. Why?
Because companies are owned by shareholders.

So if you’re sued personally, everything you own in your name is up for grabs including your company shares.
This puts your entire business at risk.

Myth No. 8: Asset protection is about hiding your assets

Answer: False

Asset protection planning should be based on the presumption that all of your planning, its purpose, and those
assets will eventually be known to creditors. This is because, one way or another, it usually is. Asset protection
provides the assurance that you don’t have to hide a thing.

Learn more about trusts and asset protection

Schedule a time to talk to a Asset Protection Specialist who can help you:

 

 
  • Better understand all of your personal and
    business risks.
  • Legally reduce taxes by distributing income to beneficiaries and bucket companies at lower tax rates.

 

 

 

 
  • Safeguard your personal and business assets from lawsuits and creditors.
  • Pass your assets to future generations without any tax or stamp duty consequences.

 

 
 
  • Create agreements that protect your personal assets from family breakdowns, business partners, and their estate.
  • Discourage creditors and legal opponents from pursuing you, your business, and any assets passed down to future generations.

Don’t wait until it’s too late. Contact us, today.

 

Request a call back >

 

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We provide Accounting, Audit, Tax (Company, Individual & SMSF) and Advisory Services specialising primarily with but not exclusively to the travel industry. We believe we provide our Travel Agent and small business clients with the best advice and service. Our Travel agency clients benefit from our long standing experience in the Travel Industry and knowledge of the compliances associated with IATA.

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