Asset protection is not only about protecting assets during your lifetime. It is also about preserving wealth for future generations by creating structures that can withstand unexpected events, including relationship breakdowns.
For families with significant assets, businesses or expected inheritances, thoughtful planning can help create stability and minimise future disputes.
Using Trust Structures to Protect Family Wealth
Trusts are commonly used as part of broader asset protection and succession planning strategies. While trust assets may still be examined in family law proceedings, the way a trust is structured and controlled can significantly affect how it is treated.
When establishing or reviewing a trust, some important considerations include:
– The choice of trustee
– Who holds control of the trust
– Succession arrangements
– The beneficiaries of the trust
Trusts are generally most effective when they are established for genuine family, commercial or succession planning reasons rather than as a reaction to a foreseeable dispute.
Estate Planning Beyond Wills
Many people view estate planning as something that only takes effect after death. In reality, effective estate planning can also play an important role in protecting family wealth. Accordingly, a simple will, may not always be the most effective option for your circumstances.
For many clients, a testamentary discretionary trust can provide greater flexibility and protection for beneficiaries, where benefits can include:
– Greater control over inherited assets;
– Protection of family wealth;
– Flexibility for future generations; and
– Reduced exposure to certain risks following relationship breakdowns.
For many families, incorporating appropriate protective structures into an estate plan can help preserve wealth well beyond the next generation.
Review How Assets Are Owned
The legal ownership of an asset can be almost as important as the asset itself. Different ownership structures (joint tenants vs tenants in common, ownership by a company, sole ownership, etc.) may achieve different outcomes. If you are going through a change in circumstances such as marriage, separation, acquiring significant assets or any other significant change in circumstances, it would be wise to review your existing structures to ensure they continue to achieve their intended purpose.
Asset protection is rarely achieved through a single document or structure. The most successful strategies usually involve a combination of sound estate planning, appropriate ownership structures, proper trust arrangements, business succession planning and regular reviews as circumstances change.
Every family is different. What works well for one family may not be appropriate for another. Obtaining advice early, allows families to identify potential risks before they become problems and to implement strategies that align with their long-term objectives.
At Streeterlaw, we assist individuals, families and business owners with estate planning, family law, trust structures and asset protection strategies designed to preserve wealth across generations. With proper planning, families can take practical steps today to better protect their future. Contact us today via phone on (02) 8197 0105 or by email at contact@streeterlaw.com.au to find out how we can assist you.
