Assets are more than mere belongings– they are the symbols and the metrics of wealth. Everyone is looking to grow their wealth, whether they are business owners or individuals. How best to grow your assets than to protect them? With different methods needed to protect different assets, this article is written to suggest ideas to help protect your assets. Here are some of them:

A discretionary trust for asset protection

A discretionary trust is arguably the most frequently used kind of trust within Australia. This protection method gives the trustee total control over how the trust income will be shared amongst the beneficiaries. However, a discretionary trust is often connected to tax planning and asset protection. For instance, an example of a discretionary trust is a family trust.

A family trust is a trust which is installed to direct the family’s business or personal assets. In this instance, the beneficiaries have no right or hold on the asset. This implies that if any beneficiaries incur a debt, the creditor cannot obtain a court order against the property.

Business restructuring

Business restructuring can take place in Australia for several reasons. However, when you need protection from partnerships and sole tradership, it can be an excellent tool for asset protection. Partners and sole traders are often liable for debts incurred in their finances or taxes. This implies that business debts can be paid with personal funds. Proper business structuring makes a clear distinction between your assets and business assets.

Example: If Ronald is a business owner who has incurred considerable debt, he cannot be held liable for the debt of his business, as his business has been set up as a company.

Move your assets to Your Spouse

Asset Transfer is not uncommon in Australia. Therefore, transferring your assets to your spouse might be a great idea if you’re considering investing in an extremely risky venture. This way, your assets are now protected since they now belong to your wife.

Example: Ronald transferred most of his assets to his wife before starting his business. When he incurred a loss, his assets were safe.

Prenuptial Agreements

Prenuptial agreements are capable of protecting your current and future assets from being jointly owned by your spouse. If a divorce was to happen, your assets would be protected.

Insurance

Insurance is one of the simplest forms of asset protection approaches. All you need to do is ensure you have enough coverage to prevent yourself from being used in debt settlement. Insurance will also help you protect your future earnings from creditors. Therefore, you could consider insurances such as life insurance, business insurance, income protection insurance and disability insurance with other forms of asset protection strategies.

Conclusion

Building wealth is the lifelong ambition of anyone, whether you own a business or are trying to grow your wealth. Since there is no specific rule regarding protecting your assets, you must understand your peculiarities and choose the best approach to protecting your assets. Life happens to everyone; however, protecting your assets will cushion its effect.