Building Family Wealth takes time. But howeasily can it be torn down in expensive litigation,legal challenges and regulatory and economicthreat?. It is not unheard of for a $1M deceasedperson’s estate to be challenged and when thathappens, expect upward of $200,000 in legalfees and years of litigation.
The bigger the estate, the larger the fees. And anyone with a business or profession, from a doctoradvising patients to a property developer withtheir latest project to a hairdresser who may havespread Covid to clients, may be exposed to lengthyand costly lawsuits.
A Real Case in Point: A family provision claim on your estate assets may result in long and costly court proceedings. In Western Australia in 2018 the judge of the WA Supreme Court castigated lawyers who had taken five years and $500,000 in legal fees to challenge a $600,000 estate consisting only of the deceased’s home. This is happening every day in Supreme Courts around Australia and we do not want that to happen to you.
There are five ways that family wealth can be attacked – each a potential time bomb on a family’s wealth and health.
Litigation
Incapacity
Bankruptcy
Death
Family Law
Litigation
We live in an era where our employees, children, spouses, neighbours, government, councils, tenants and regulators can sue you, and there is no end of No Win No Fee lawyers ready to take up the case.
Litigation exposes all assets in your own name. The biggest threat is not the litigation itself, but the time taken in the legal system, the stress and escalating legal fees.
Incapacity
Where a person suffers from mental incapacity, then they cannot be a trustee or director of a company. Medical events can put people out of action for long periods.
Assets, investments, companies, trusts, super funds are exposed where a key person, director or Trustee becomes incapacitated.
Bankruptcy
For many business owners and professionals, Covid has impacted their income and the strength of their business or career. We are moving into unchartered waters, and many insolvency practitioners are talking about the significant uptick in their business – at the expense of family wealth.
Assets, investments, companies, trusts and even super funds are exposed where a key person, director or Trustee is in the throes of insolvency or bankruptcy.
Death
On death, most people who have a Will would expect that all of their personal assets, including home, investments and superannuation, would be paid out in accordance with their Will. Wrong!!! Every State in Australia allows a disaffected person (someone who did not benefit from a Will or get what they believe they deserved) to claim against an estate. Any claim overrides the provisions of a Will.
Assets, investments, companies, trusts, super funds are exposed to family provisions litigation where a key person, director or Trustee dies.
Family Law
Most people are not aware that a simple de-facto relationship that has lasted two years means both parties of the relationship, in the event of a relationship breakdown, have full recourse against the other’s property under the Family Law Act in Australia.
The Family Law Court has supreme powers to split all assets, investments, companies, trusts and super funds in a relationship breakdown.
Solution - The protector
“The Protector” - a family wealth protection package, which not only provides asset protection but ensures that your assets are held for the benefit of those beneficiaries in your lineage or bloodline that you want. This will ensure that your assets are kept in the hands of your lineage.
There are no capital gains tax or other taxation issues.
There are no stamp duties or other State taxes.
What to do next?
Given the litigious society we live in and where state governments, the ATO and other federal agencies can garnish (take) monies from your bank for unpaid debts, and the danger of leaving your estate exposed to long and costly litigation from a family provisions claim, we feel that it is important for all of our clients to examine the process and determine whether or not to protect their assets and legacy with The Protector.
The Protector is only solution to protecting your Family Wealth against the Big Five exposures listed above. It is absolutely vital and should have been completed by everyone yesterday. Who could not benefit from having a Family Wealth Protection solution in place – even if it is only for your family home?
Contact Nivara now to secure your family wealth package.
Don’t delay and get the weight lifted off your shoulders now. A sample data capture for calculating net wealth has been provided below.
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