Asset Protection Made Easy
It normally takes many years and a lot of hard work to build up wealth. Why then, would you not take some steps to protect your assets?
- Personal Guarantees. There are many business owners with huge personally guaranteed trade debts. These are not inevitable and often can be negotiated away, side-stepped, or capped.
- Business Structure. It just doesn't make sense to trade as a sole trader and fully expose jointly owned assets. A partnership is even worse - why would you risk taking on the liabilities of your business partners? A limited company is inexpensive and still enables you to remain self-employed.
- Don't ignore your advance account to your company. Is this secured on the company's assets? Should this be owned by your trust.
- Don't just (as many do) set up a trust and think that you're sorted as there are many issues to consider. For example, how do you separate riskier business assets from your debt-free family home or investments? Should the trust own the shares in your trading company?
One of the biggest problems with a trust is the debt created when your assets are transferred to the trust which more often than not takes many years to gift. Did you know that there is a local lawyer who can help you eliminate settlor debt within a few weeks?
The sooner you start planning to safeguard your future, the sooner your assets will be protected.
If you have any tax or business queries of any kind telephone 0800 ASK NICK, e-mail firstname.lastname@example.org or use "Contact Us" on www.abac.co.nz. The information in this article is of a general nature and should not be relied upon as a substitute for specific advice.