1. Incorrectly registering or “titling” your assets. In my work, I see many clients who are convinced that their assets are appropriately titled, only to discover serious errors upon checking. This is often a case where the weakest link in the chain (maybe some teenage clerk at a busy registry office) has mis-described the asset or its owners. Correct registration of assets is critical to the ownership & control tests which underpin all of your legal protections.
2. Deferring or delaying your protection planning. If you wait too long, it will be too late. Like insurance, you generally cannot apply for protection after the disaster has already struck. The longer your asset protection plan has been in place, the stronger it is likely to be. It will also cost less to do the planning long before you have a problem. Once a lawsuit has been filed against you, any transfers you make thereafter can be prevented or overturned. Make sure you have your asset protection plan in place and up to date long before you need it.
3. Mistakenly committing fraudulent transfers. If you try to transfer assets to a friend or family member in order to avoid losing them during a settlement, you may find that the courts can reverse the transfer and hold the parties to the transfer partially responsible for criminal &/or civil penalties. People really have gone to jail for attempting this. However, if the transfer is done carefully, and well before any litigation arises, then this strategy can be made to work in certain circumstances.
4. Misunderstanding how asset protection works. Asset protection rarely makes you “judgment proof,” because even if your assets are protected, you may still face judgment. In some cases, efforts you have made to protect your assets can be overturned. This is why it is important to work with a lawyer who specialises in estate planning, and to get your plan in place as soon as possible, and to keep it up to date.
5. Trying to hide your assets. This is rarely possible, and frequently illegal, and not to be encouraged. The costs and consequences of this type of strategy is seldom worth the risk. Even moving assets offshore does not prevent them from being discovered.
6. Assuming you can outsmart your creditors. Professional debt collectors, liquidators, trustees-in-bankruptcy and the lawyers working for them have done this before. In fact they do it all day, everyday. You might think you have a cunning and novel scheme to avoid paying your debts, but the odds are stacked against you figuring out a way around the system.
7. Not keeping your plan up to date. In a state like South Australia, newer bankruptcy laws permit the “clawing back” of assets you may have tried to unsuccessfully protect (too late). Estate planning is not a “set and forget” exercise.
8. Assuming it is too late to establish an asset protection plan in Adelaide. It is never too late to review your options, and create or modify an appropriate plan. Doing something is better than nothing. However, it is important to plan ahead and understand that if you have assets, you are responsible for protecting them. Your asset protection plan is stronger if it was created long before you received notice of legal action. In order to provide the best protection for your assets regardless of what the future holds, contact a lawyer who specialises in estate planning.
Rod Genders is a senior Australian lawyer specialising in estate planning and accident compensation. His boutique specialist law firm is one of the oldest and most respected in Australia – visit it at www.genders.com.au . Rod is also a prolific author and speaker. Some of his articles and books on Wills, Probate, Trusts, Estate Planning, Retirement and Asset Protection Planning in Adelaide may be found at www.genders.com.au/adelaide-lawyer-blog.