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Wealth, Asset Protection and Estate Plans

In protecting and preserving wealth, one must consider strategies for asset protection and estate planning.  


Clients often underestimate their net worth and how they should own those assets. In most cases, people buy property and assets without considering how to protect those assets from a variety of possible threats.

Protecting assets is not just for the wealthy, but also for anyone who owns property and assets and cares about protecting their wealth. The best gift of all is to protect every asset in the event of an unforeseen adverse situation that arises exposing those assets to a claim from a third party.

Most couples or partners own some assets jointly, such as homes, bank accounts, shares, and other investments. The property and assets may be in danger if one of the partners; carries on business, or is a director of a company, or faces a public liability claim or professional negligence claim not covered by insurance, or incurs personal debts. The simplest form of asset protection for couples is to transfer property and assets to the spouse or partner that has no exposure to risk.  


A current transfer of property and assets from one spouse to the other can protect those assets from the transferring spouse’s future creditors, as long as the transfer was not intended to defraud any known or future creditors.  


Recent trends and developments in the laws affecting Wills increases the possibility for some aggrieved person or creditor to make a claim under a deceased’s estate and challenge the Will seeking some form of benefit or payment of personal debts from the estate. One can avoid these disputes by properly considering the alternatives when acquiring assets or when implementing asset protection.  


Marriage and relationships offer the easiest method of transferring assets, but has a number of inherent dangers if the relationship breaks down. The parties can anticipate and avoid losing ownership rights by entering certain agreements. The establishment of separate and independent trusts are useful in holding the ownership of the property and assets.

The limitations in the bankruptcy laws prevent creditors from pursuing assets owned by trusts, and properly created trusts prevent creditors from taking over, or appointing a new trustee to the trust. One can build complex or simple structures as modules (designed to personal requirements) to isolate property and assets from the high-risk areas of business or personal activity.  


Proper implementation of asset protection depends on when, how and why the transfer of assets occurs. If one attempts to implement transfers as a reaction to financial stresses and likely claims by creditors or others, the transfer may not be effective, and is subject to various legal tests, such as the statutory periods (clawback periods) set out in the Bankruptcy Act, or reasonable benefit limits under Superannuation laws.

Sensible protection at the outset is the best defence. If one puts asset protection in place for proper commercial reasons, it is very difficult for subsequent attacks to succeed.  


A fundamental part of any estate plan is to determine how one should currently own property and assets included in one’s estate, and in the future. This is crucial if there is any risk of exposing property or assets to possible third party claims. The estate plan must consider the Will and Testamentary Trusts.

A Will is the legal written disposition of property and assets, which takes effect on one’s death. The Will allows one to choose which beneficiaries will receive the property and assets, and which executors will carry out the directions. By failing to exercise this right to make the Will, one loses the ability to make those choices with the consequence that there is no strategy or plan is in place for the estate.

The estate plan must ensure there is provision for the care and upbringing of children or other dependants. One can retain the right to choose guardians to take care of children until they become adult age, however, this right is lost if one does not create a valid Will.

The estate plan asserts control over who inherits the property and assets; and imposes any conditions on the right to, and use of, the property and asset by creating tax effective Testamentary Trusts in the Will that benefit and take into account the circumstances of family or other beneficiaries.

A comprehensive estate plan means the executor has effective written instructions, which minimizes disputes and maximize savings and benefits for the estate. The estate plan ensures one’s affairs are in order and according to one’s personal choice and intentions. This personal choice does not exist if there is no valid Will, and statutory formulas determine the beneficiaries and their rights (if any) to property and assets. These formulas do not take into consideration any other possible rights or beneficiaries.

Part of the estate plan is not to leave anything or the Will to chance, and to invest serious time and effort in planning and obtaining good advice on every aspect.

Regular reviews of the Will ensure one maximizes the intended benefits to the beneficiaries, as changes in one’s lifestyle can directly affect one’s future intentions in the Will. Apart from lifestyle changes, which can affect the true intentions, reviews will examine current legal requirements and factors for the Will or Testamentary Trusts exist, such as Age, Marriage, Divorce and Separation, Testamentary Capacity, Written contents of the Will and its interpretation, Execution of the Will and Financial planning aspects of the Testamentary Trusts.

The Supreme Court becomes involved when disputes or doubts arise on any of these issues, and will determine the validity of the Will. If the Supreme Court rejects the validity of a Will, there will be undesirable consequences for the estate.


Behan Legal advises and assists clients on these important issues. For an appointment, call 03 9646 0344 .

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