Company & Trusts

Asset Protection, Companies and Trusts

If you face liability, you risk losing assets. Asset protection is the process of limiting assets that are exposed to risks. This involves:

• Protecting your personal assets from your business and investment risks
• Protecting your business assets or investments from your personal risks

Our role is to limit this risk exposure. By understanding your current circumstances and future plans, we can advise you on a range of asset protection strategies, including:

• Establishing new discretionary trusts and companies
• Reviewing existing trusts and companies, making amendments where necessary
• Creating asset and intellectual property protection
• Establishing special purpose vehicles (SPVs) including unit trusts for syndicates and joint venture developments
• Managing family wealth
• Structuring business and property purchases
• Gift and loan back arrangements to protect existing assets
• Entering company Buy-Sell Agreements (Share Sale Agreements)
• Company restructures

Asset Protection for a New Business or Property Investment

When establishing a company or trust, it is essential to be informed about the relevant structures, what they are designed to achieve, and the rights and obligations of the various roles therein.

Asset protection structures that balance your risk management, corporate control, flexibility and financial planning are critical when purchasing an investment property or setting up a business.

At Pacific Law, we hold decades of experience acting for investors and business owners to ensure you choose the most appropriate structure, by:

• Understanding the different structures available and the benefits and limits of each
• Understanding the roles within these structures and who should fill those roles (director, shareholder, appointor, trustee, beneficiary)

Our experienced asset protection experts will tailor a solution to your needs by understanding your particular circumstances and future plans, ensuring you understand the various options available.

Asset Protection for Existing Assets

‘How can I protect my family home?’ is a question we are commonly asked. While your home is usually owned personally rather than through a trust, you can still secure protection for this key asset.

The gift and loan back arrangement involves a series of transactions to reduce assets that are vulnerable to your risks by transferring equity from you to a protected structure. This is not a transfer of the asset itself, so does not incur stamp duty or capital gains tax.

The gift and loan back arrangement requires that actual transactions occur, and are properly documented. Without transactions, there may be no real protection provided.

The arrangement is tailored to your circumstances to ensure it is valid and effective, taking into consideration:

• Whether security is taken for the loan
• The money available for the transaction
• The effectiveness of the arrangement
• Whether the arrangement will affect borrowings

Buy / Sell Agreements

Is your business protected if one of the owners leaves? All businesses should have a Buy-Sell Agreement in place that determines what happens if a business owner retires, is incapacitated, or dies.

A Buy-Sell Agreement covers the terms of an owner’s departure, to ensure all parties are protected.

The Pacific Law team can help you navigate important issues for consideration, such as:

• Will the departing business owner sell their ownership in the business?
• Will the continuing or incoming owners have to pay the departing owner?
• Is the payment at an agreed rate, or market value?
• What happens if an owner becomes incapacitated or dies?
• Will insurance cover any of the payments?

Buy-Sell Agreements are a critical document to have, and can help business owners and their families to avoid unnecessary stress in the future.

If you do not have one, call our Pacific Law team today to discuss putting one in place.