GROWING AND PROTECTING YOUR WEALTH

Commonly asked questions about wealth protection

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 (after the United States). People can become defendants in lawsuits 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 you lose, to be financially crippling.

Also, 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 so complex that maintaining total compliance at all times is virtually impossible. The penalties imposed for failing to comply with regulations can also be financially crippling.

  • 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

These risks 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.

Everyone should have strategies in place designed to protect their wealth. But some people are more obviously in need of wealth protection strategies than others. These people include:

  • The very wealthy
  • 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 at risk of being sued

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

Some strategies that often form part of a wealth protection plan are:

  • 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 real estate investment) 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 you have an interest
  • Structuring the appointment of company directorships within a family group to limit the family group being exposed to risk arising out of directors’ liabilities
  • Strategic use of superannuation and insurance
  • Developing agreements to deal with the orderly succession of business ownership after critical events such as death, disability and voluntary retirement

There are many strategies for building on the wealth that you already have, such as investing in property or shares, taking advantage of certain superannuation options, or setting up trusts. Receiving professional advice can help you to understand any taxation implications and minimise risks when you are making important financial decisions.

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We’ll always be honest and upfront. We’ll look you straight in the eye and agree on a plan before moving forward.
We know the ropes and our professionals have expertise specific to every legal situation—many are Accredited Specialists.
We speak clearly and directly, so you understand our advice and can make decisions with confidence.
We’re local to wherever you are, and our offices are owned and operated by friendly, local professionals, proud of their communities.
We genuinely care about our clients. It’s the core of who we are and has been since the first practice was opened by ER Stack on the NSW Mid-North Coast in 1931.
We make the process easy for you with the latest tech to keep services cost effective—and you in control.

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