Scott Fitzpatrick:
Asset protection, protecting your ass. This next concept is one that’s quite overlooked by advisors in legal accounting and wealth management. I always like to quote that in New South Wales, it’s the third most litigious state in the world after Florida and California. So, when we’re talking about wealth advisory, a really good start point is, are we confident we’ve got enough brick walls in place when we’re building out wealth for our clients? Now, it’s not brick walls from the ATO, but it’s brick walls from litigation. None of us go into business with the idea of having to go home and tell our spouse that we’ve “Lost the family home.” Quite often, our houses are used as collateral to start us off. Quite often we do a lot of inter-entity loans around the place, that we need to clean up.
So, the asset protection conversation is really about how do we build a brick wall here, keep our personal wealth money over here, and how do we keep our business risk over here on this side? So, this brings in key concepts such as gift and loan strategies, where we might be able to gift the equity from here into a trust, a safe harbor trust. That means understanding what personal guarantees and warranties we’ve given out. That means understanding our inter-entity loan accounts. It means understanding our business structures and our director roles and responsibilities over here.
What we’re trying to do is build brick walls between our personal wealth and our business risk. Or build a plan around this, we might not be able to solve it day one, but at least we’re across the issues now. We need to build a project to move the risk, keep it over one side, keep our wealth over on the other side. There’s some really great tools around that we can do that. We also need to surround yourself with the right legal advisors here and the right accounting advisors. So, this leads to this conversation around your Best of Breed Team. My point is that asset protection is rarely spoken about and is a big piece of value that you can bring to your business and client.