Asset Protection Checklist

Back to Article Listing

Asset Protection is an area that has become increasingly important for both professional advisors and clients alike. It may seem obvious, but it is worth noting that asset protection is about implementing strategies to protect assets, which will often be family assets, from the financial risks that we may encounter in everyday life, and particularly business life.

The provisions of the Bankruptcy Act have for many years provided impediments to those who desire to transfer or dispose of assets in the period leading up to the bankruptcy. It is important to remember that the Bankruptcy Act has been around and evolving for literally hundreds of years. So don’t expect that you can easily slip out of the traps that the Act has developed in that time.

Readers are no doubt well aware of the risks faced by business owners and other stakeholders in conducting business, particularly in the current economic climate. It is therefore imperative that any asset protection strategies are implemented sooner than later. Pointon Partners, Trade Mark Attorneys and Lawyers, have developed the following “10 Point Asset Protection Checklist” which you may find of assistance in advising your clients:

1. Property Transfers between spouses.

- Note: Bankruptcy Act ‘claw-back’ provisions which may defeat pre-bankruptcy transfers

2. Are assets held in company or trust entities or in personal names?

- Business conducted in entity separate from where assets accumulate?

3. If individual a company director, are their assets owned personally?

- Note: personal liability of company directors

4. Have any personal guarantees for business debts or liabilities been granted in favour of creditors?

- Note: Seek releases when leave business

5. Ensure discretionary trust provides for appropriate provisions in the event of bankruptcy of Appointor

6. Ensure loans from stakeholders to business operating entity are appropriately secured with mortgage debenture, mortgage, registered charge or other securities

7. In appropriate circumstances, consider implementing asset protection strategies in relation to a spouse or de facto partner

8. Consider implementing appropriate business structuring strategies for asset protection purposes:

- Separate ownership of intellectual property assets from business 
- Use of small business CGT provisions to move business away from property assets
- Consider the more complex strategies that may be available

9. Consider whether appropriate to transfer assets to superannuation fund

10. Once problems arise, seek professional advice to implement an appropriate strategy which may be utilised in the particular circumstances.

Thanks to Tony Pointon of Pointon Partners [adp@pointonpartners.com.au] for preparing this article for our newsletter.

Last Updated: 21.01.2009

Back to Article Listing