Do You Need an Asset Protection Trust?

An Asset Protection Trust (APT) is a financial arrangement that can be incorporated to protect your hard-won assets creditors and legal liabilities.

At the same time as it protects, your APT can also allow you to benefit from those assets.

Our small business law team on the Gold Coast is often asked about APTs. Once controversial, APTs are now legal in Australia.

An APT is an important strategy, providing significant advantages for high net worth individuals and families looking to protect their wealth.

Incorporating an APT could be a wise move for both you, your family, and your assets.

Consider these key reasons for APTs:

• Preserve family wealth across generations
• An APT can allow your family assets to remain protected within a trust structure.

This means your assets can be preserved across generations and will not be eroded through divorce or by lawsuits, creditors and claims.

By ringfencing assets such as property, shares and businesses, represents a way to ensure continuity of your family legacy.

Shield assets from business lawsuit risks

Using an APT to partition your personal assets, you separate them from trading company assets that could be exposed to lawsuits and claims.

This preserves your personal wealth by containing your business risks. This remains the case, even if your company were to fail.

Tax minimisation benefits

APTs can also help minimise exposure to capital gains, income and estate taxes. Gifting assets directly does not have this ability.

This legitimate tax advantage can be used for long-term preservation of family wealth over generations.

Retain some control over assets

While legal ownership is relinquished, distribution roles such as appointer and protector, enable some flexibility and control to be maintained.

These are mechanisms that will prevent full loss of influence over the trust.

Protect assets pre-bankruptcy

If your correctly structured APT is incorporated before financial troubles arise, it can protect some assets from liquidation during bankruptcy proceedings initiated by creditors or collection agencies.

Proper advance planning is key.

Provide for special needs beneficiaries

While holding your capital in trust protects it, your APT can also be tailored to allow beneficiaries to receive an income.

This involves customised distribution rules to enable care for vulnerable family members, such as those with mental illness or disabilities.

Structure correctly for full protection

APTs are not automatically bulletproof. But expert legal advice can ensure proper structure to protect against creditors’ claims on the family wealth.

In the hands of an experienced commercial lawyer, your APT can be structured to achieve maximum asset security and provide robust protection of family wealth across generations.

With APTs, cost and complexity need to be factored in.

For personalised guidance on APTs

Speak to a specialist asset protection lawyer by booking a consultation with our Gold Coast small business law team.

We can assess your asset situation and help you make informed decisions about the potential for preserving your family’s wealth long-term using an APT.

Contact us today at Ballantyne Law.