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Wealth preservation – Let us help you protect your hard earned assets

Wealth preservation has become a significant issue as our lives become increasingly litigious. Both individuals and businesses are at risk of sometimes frivolous claims, so more and more people are ensuring that their assets are well protected.

In simple terms, a wealth preservation strategy separates assets from risks. Traditional strategies involve ‘gifting assets’ (putting assets in the name of a trusted person/entity who does not take on any risk), however there may be problems with this approach. For instance:

  • Lack of protection – Assets are not always protected in the event of bankruptcy or liquidation.
  • Stamp duty – This is often payable on the transfer of property even if it is gifted.
  • Capital gains tax (CGT) – The transfer of an asset may trigger a CGT liability (tax is payable as if you had sold the property at its market value).
  • Loss of CGT exemption – If you transfer your share of an interest in your principal place of residence, you may lose the exemption for increases in the value of the residence from the date of transfer.
  • Loss of pre-CGT status – This occurs if you gift an asset that you held prior to the introduction of CGT.
  • Loss of negative gearing benefits – This occurs if you transfer an asset out of your name.

When considering wealth preservation as part of your overall financial plan, strike a balance between various options. Sometimes an emphasis in one area may reduce efficiency in other areas. Such is the case when trying to balance the issues of wealth preservation, tax efficiency and estate planning. A tax-efficient structure may provide no protection for assets; or a structure where all wealth is preserved may be too rigid to operate a business and maximise wealth.

Consider the following questions as a starting point for considering the level of wealth preservation you require.

  • Have you undertaken a risk management review of your business?
  • Have you established business policies and procedures to reduce risk?
  • Have you made a note in your diary to review risk management policies and procedures with your staff?
  • Have you reviewed your general insurance?
  • Do you have appropriate insurance, and the correct level of coverage?
  • What is the claims history of your insurance providers?
  • How can you reduce the risk of having a claim knocked back?
  • In what entity do you operate your business?
  • Does the entity provide wealth preservation?
  • Is my wealth preservation tax efficient?
  • How should personal assets be owned?
  • Who are the appointers, trustees and beneficiaries to the trust?
  • Are these people at risk personally?
  • Who are the directors, secretary and shareholders to companies?
  • Do these people understand their roles and responsibilities?
  • Are these people aware of the consequences if they fail to act in accordance with the law?
  • Have you considered Unit Holders and Shareholders Agreements?

If you are in business with others:

  • Do you have a buy/sell agreement?
  • Is it funded or unfunded?

Our Advisers are specialists in identifying potential problems with your structure, and implementing plans to ensure your assets are covered.

We offer Wealth Preservation as an integral part of our Private Wealth Program.

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This information is not personal advice and you should not act on it unless you have received personal advice from a licensed adviser. Please read our Important Information.

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