Would you put your house in your best friend’s name?
Probably not. But if you if something is not in your name, how can someone take it from you?
That’s what asset protection is all about. Of course, it’s not limited to moving properties around in other people’s names… that’s why I take a closer look at asset protection in this 2 Minute Accountant video.
Different levels of risk = different levels of asset protection
Consider the risks for someone like an accountant: What is the worst that can happen? Someone gets a paper cut at work. But when you are a heart surgeon, you could kill somebody.
Assessing the risks you are liable to will help you identify the assets you need to protect. And how to protect them.
The two things you can do to protect your assets are:
- Put your properties under other people’s names
- Have a trust
- Get a good insurance plan
You might also be interested in: Personal Insurance 101
Keep your assets clear: have them in other people’s names
The first way to keep your assets clear is to have them in other people’s names. And that sounds great, doesn’t it?
But do you trust a family member to own your house? Do you trust a best mate to own one of your investment properties?
The answer is probably “No.” But the point is, if you don’t have something in your name and you don’t have a legal title to it, then nobody can take it from you.
You can also have assets in your spouse’s name. There are rules and regulations in the family law court about assets and splitting them up. I advise you to contact a family lawyer about this.
They can give you all the information you need. The main idea is: if my house is in my wife’s name and I get sued personally, then they cannot go after my house.
Tip: There are exemptions for stamp duty. We all know when we sell an asset like a house, we have to pay stamp duty. If you transfer your house from yourself to your spouse, there are privileges which reduce the amount of stamp duty you pay to zero.
[ctt template=”7″ link=”8f3FB” via=”no” ]If you transfer your house from yourself to your spouse, you can reduce the amount of stamp duty to zero.[/ctt]
Sep up a trust
I’m not going to go into a lot of details here. I could write a novel on this topic and still wouldn’t finish everything I want to say.
A trust is a construct, it’s a legal entity which can sue and be sued. And you can get the benefit of that.
You should check it out in more detail.
Have a rock solid insurance plan
A good strategy doesn’t just mean moving stuff into people’s names, it also means insurance.
And we don’t simply stop at insurance… but it does play a crucial role in this world.
Have a look at what your risks are. Put in measures which are going to mitigate or reduce those risks: evenly spread out your risks among your different asset areas.
You might also be interested in: How Much Do You Know About Income Protection?
Need help coming up with a battle plan for your asset protection?
I’m glad you asked. I’m here to offer you my full support in coming up with a powerful plan to protect all your assets.
As I said before, it’s not all about moving properties in other people’s names. You need to create a balance between insurance, trusts, property owners and your business…
When you decide it’s time to create an asset protection plan, contact me.