The Asset Protection Toolbox: Strategies to Protect Client Wealth - a five part on demand webinar series for accountants

Program 1: Protecting the Family Home – Is it Out of Reach?

A fundamental asset protection strategy is ensuring the family home is not owned by an “at risk” spouse. However, how bulletproof is this strategy when the testing time comes? This session explains why the strategy may require more than a set and forget approach, including:

• Does it matter how:
  • mortgage repayments are funded?
  • maintenance, improvements and other property costs are funded?
• When can an equitable interest exist?
• How is the presumption of advancement applied?
• Does it make a difference if the home is originally acquired in one name or subsequently transferred from the “at risk” spouse?
• How should the borrowings be structured?
• Case law, including:
  • The Trustees of the Property of John Daniel Cummins (A Bankrupt) v Cummins (2006) HCA 6
  • Commissioner of Taxation v Bosanac [2021] FCAFC 158
• Do’s, don’ts and tips when implementing the strategy
• Case studies

Program 2: Choosing the Structure from an Asset Protection Perspective

There are a lot of factors and issues to consider when advising on the structure to house either a business or investment funds. This session drills down on the asset protection issues to consider when making the decision, including:

• What are the options and risks of each structure?
• Which structures better suit which activities?
• Who should act as director/s and how many directors should be appointed?
• Choosing a shareholder entity to maximise asset protection
• What are the current trends in relation to structures that practitioners are advising clients to use?
• What options are available when clients have outgrown their original choice of structure?
• The use of bucket companies
• Case studies

Program 3: Protecting the Next Generation with Testamentary Trusts

Testamentary trusts can be a useful inclusion in a will to protect assets earmarked for the benefit of beneficiaries coming under attack from creditors. This session looks at the pros and cons of including a testamentary trust into the estate planning process, including:

• What situations would the use of a testamentary trust be beneficial?
• Identifying “at risk” beneficiaries
• Do the benefits for a child under 18 in a will automatically revert to a testamentary trust?
• Can testamentary trust assets be at risk in events such as:
  • bankruptcy of the beneficiary?
  • the beneficiary being involved in a relationship breakdown?
• Can the choice of trustee affect a beneficiary’s Centrelink entitlements?
• Practical examples of will clauses that initiate a testamentary trust:
  • is it prudent to include a trust deed for the testamentary trust to accompany and form part of the will?
• Case study comparing deceased estate proceeds paid directly to a beneficiary versus to a testamentary trust

Program 4: Section 100A Reimbursement Agreements – It’s Not All About the Tax

The recent raft of ATO guidance on section 100A has definitely put trust distributions, particularly to adult children, in the spotlight. Whilst the tax considerations are understandably front of mind, lurking in the background is an asset protection risk that will likely need to be addressed. This session delves into the potential risks, including:

• The asset protection risks on built up unpaid present entitlements (UPEs)
• How to manage distributions where funds are not paid to beneficiaries
• Strategies to reduce the risk without adversely triggering section 100A
• What are the risks of:
  • gifting UPEs to parents or back to the trust as corpus?
  • leaving UPEs unpaid?
• Managing UPEs of “at risk” beneficiaries, including:
• adult children involved in relationship breakdowns
• adult children entering into risky business ventures
• Reducing UPEs:
  • can the ordinary family or commercial dealing exclusion apply for strategies to reduce UPEs?
  • what type of payments on behalf of beneficiaries can effectively reduce the UPE balances?
• Review of asset protection arguments in Guardian AIT Pty Ltd ATF Australian Investment Trust v Commissioner of Taxation [2021] FCA 1619 (on appeal)
• Case studies

Program 5: Has the Corporate Veil Been Unveiled?

Traditionally a reference to the corporate veil was enshrined in the belief that directors and shareholders were personally removed from responsibility for the liabilities incurred by their company. Fast forward to today and “piercing the corporate veil” forms an important part of a practitioner’s discussions with clients on their asset protection strategies. This session looks into the reduced effectiveness of the limited liability term, as well as strategies to ensure all is not lost, including:

• What situations can directors or shareholders be held personally liable for company liabilities:
  • with the ATO
  • with other entities
• Can a corporate trustee become liable for liabilities of the trust?
• Can directors remain personally liable for company debts after their resignation?
• What are the factors that suggest that a company is insolvent?
• Action to take if a company is insolvent
• Restructuring of distressed businesses to ensure the new entity is a legal phoenix company
• Asset protection strategies, including:
  • securing of loans
  • use of the Personal Property Securities Register
• Case studies