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Michael Yardney Podcast

Insightful, educational and always interesting

Listen and learn from Michael Yardney, Australia’s most trusted property commentator and a group of experts as they discuss Property Investment, Success, Money and Finance to help you multiply your wealth.
While Michael is best known as a property expert, he is also Australia’s leading authority in the psychology of success and wealth creation. You’ll enjoy the way he challenges traditional finance advice with innovative ideas on real estate investing, personal finance and wealth creation. 
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Sep 23, 2020

Today, we’re going to be talking about asset protection with Australia’s leading property tax strategist, Ken Raiss.

Asset protection is the use of smart legal strategies to protect what’s yours.

For instance, we’re going to discuss why people who own properties in their own names are putting themselves at risk, and why even homeowners, not just property investors, need to have asset protection strategies in place.

Very few of us are taught about the importance of asset protection, yet smart investors look for ways to protect their assets from their creditors.

Hopefully, after today’s show, you’ll have a bit more clarity about what you could be doing and should be doing to protect and keep your assets so that you can pass them on later.

  1. What is asset protection?
    1. Safeguarding your hard-earned assets from litigation whether eventually successful or not. Defending an action can be costly in time, money, and emotionally.
    1. The world is becoming increasingly litigious.
    2. Many people are seeing the easy road to financial security is to sue someone for their wealth.
    3. I have read that Australia is the 3rd most litigious society in the world.
    4. In these uncertain times and with no-cost legal services available many people are choosing to sue someone even if for greenmail – to get something just to go away.
  2. Why should we be concerned about it?
    1. There are many instances of both legitimate and unscrupulous litigations.
    2. We should all do the right thing and have appropriate insurances in place but sometimes this is just not enough for example:
  3. What do you say to people who believe this is just being paranoid?
  4. You have a car accident before paying your overdue registration and insurance due to a busy work week.
  5. Your house is underinsured and burns down and destroys the next-door neighbor’s property. You are up for the underinsured payment
  • Your child illegally downloads music or videos.
  1. You take on a new job with increase occupational health and safety responsibilities.
  2. You become a director in a business.
    1. Sometimes you are called a director but not on the ASIC records.
    2. You are responsible for all tax obligations plus the normal director responsibilities
  3. I heard a story a few years ago when a thief while running from the police jumped a fence and fell into a hole that the homeowner had dug for the garden. The thief injured himself and sued the homeowner
  • Safeguarding the family wealth for current use and to pass down to the next generation is not paranoid but prudent. The older you get the harder it is to rebuild so why risk the twilight years after a lifetime of hard work
  1. Typical Strategies and Mistakes
    1. Typically, people go and see their lawyer for these strategies, but the lawyer does not understand the accounting, taxation, and estate planning intricacies that all must be built into the final solution.
    2. I see many people who have transferred their assets to a trust which for investments is reasonable but there is a cost in relation to capital gains tax For property there is also the potential increase taxes in relation to land tax and the foreigner’s taxes if they have overseas relatives.
    3. They also ignore the impact on the family home. In a trust, they lose the main residence exemption and will be subject to land tax.
    1. You need an integrated approach that looks at the legal, taxation, accounting, estate planning and future changes to your life needs when looking at an appropriate strategy.
    2. We have seen many clients implement strategies, but the majority have only looked at one aspect of the total picture and have therefore left holes that can be exposed which reduces the overall effectiveness of the strategy. They have done the work to identify their concerns, have found a solution only to be let down in the execution.
    3. At Metropole Wealth Advisory we have four different strategies that can help people and in all cases, no taxes are triggered. You can also protect the family home and keep the main residence tax benefits in relation to CGT and land tax.
    4. The most appropriate of the four strategies is identified for your specific needs and as your life circumstances change, they can be modified.
    5. Each of the strategies build on a solid foundation looking at tax, accounting, estate planning future flexibility, and with the added benefit of adding a layer of asset protection for your family wealth in case of litigation.
    6. The benefit of the Metropole Wealth Advisory way is we look at all assets including the value of wealth in your trusts or companies.
  2. How Should People Go About Protecting their Assets
  1. Typically, these are ignored due to the tax implication but there are solutions when taking an integrated approach.
  2. The wealth in these structures is incorrectly perceived as being safeguarded. This is not the case if the tenant in an investment property sues or a customer sues a business. The value is protected if you are individually sued but the other risks within the structure can be greater. It is like the trojan horse, if the attacker is inside the gates they can strike.

Links and Resources:

Ken Raiss, director Metropole Wealth Advisory

Have a chat with Ken Raiss to ensure you have the correct asset protection strategies in place – click here

In turbulent times like this why not get the team at Metropole on your side – find out more here

Shownotes plus more here: The right and wrong way to protect your assets with Ken Raiss

Some of our favourite quotes from the show:

“Your assets, your personal assets, things you own, are at risk for other people taking them.” –Michael Yardney

“The lawyer was right, legally. The accountant was right numbers-wise. The financial planner did the right thing. But the left hand doesn’t know what the right hand is doing.” – Michael Yardney

“When things happen in life, things that we don’t like, we can either choose to see them as a problem or as a solution waiting to be discovered.” – Michael Yardney


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