Protecting your assets from marital breakdown – estate planning
By David Baruffi, Financial Advisor
One of the most pressing concerns in Estate Planning is protecting assets from marital breakdown.
However even though the Family Court has the ability to ignore certain sham structures designed to deprive litigants of their rightful claims on assets there are means by which you can offer some protection of the assets, namely the use of trusts.
A trust is a legal structure used to own assets on behalf of beneficiaries. There are a number of trust structures used for holding assets, the most common of which are discretionary trusts (where who benefits from the trust is up to the discretion of the trustee) either current (intervivos) or Testamentary (established on death).
Generally, assets of a correctly structured trust (i.e. bonefidi) are not assets of marriage. In the case of an inheritance, leaving the in heritance to a Testamentary Trust instead of directly to a beneficiary can reduce the chances of a successful matrimonial claim. However the Family Court can ignore a “Sham Trust” which sole purpose is to thwart a matrimonial claim so establishing a trust in the right manner for the right reasons is imperative.
My advice is when you are planning your estate make sure you raise any concerns about the exposure of your assets to the Family Court and explore the options of using a discretionary trust for asset protection.
If you have any questions or would like to speak with a Blueprint Wealth advisor, please contact us.
David Baruffi is an authorised representative and credit representative of AMP Financial Planning. Blueprint Planning Pty Ltd (ABN 78 097 264 554), trading as Blueprint Wealth, is an authorised representative and credit representative of AMP Financial Planning, Australian Financial Services Licensee and Australian Credit Licensee (AFSL / ACL 232 706).
This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.
