Story image

How a trust can protect your assets

08 Feb 12

Trust expert Janet Xuccoa talks about how business owners and entrepreneurs can protect their assets in situations where things go wrong by looking at a common mistake she frequently sees – people think their assets are protected when in fact, their assets are at risk:

Most people understand they need to protect their assets from risks – risks that occur as a result of being in business.  For this reason, people often chose to take out insurance policies. Unfortunately, not many people understand that the best way to protect what they have is simply not to own the assets in the first place. How does that occur? By using a Trust.

Take, for example, Mr and Mrs Smith. They own a business that installs windows called Smiths Window Installations.  After much negotiation, they begin working for a developer, installing many windows in the new apartment block he is building. The developer goes bust and the Smiths’ business doesn’t receive payment. But that’s not the end of the story; because Smiths Window Installations hasn’t been paid, it can’t afford to pay the  manufacturing company who supplies the windows to it. Ultimately, Smiths Window Installations are sued, and so are the Smiths personally. The sad ending to this story is the Smiths lose everything they have, including their home.

If an ounce of prevention had been taken before the Smiths went into business or at the very least, during the time they were in business, their home may well have been saved. All that needed to have been done was for the Smiths to put their home in a Trust.

Of course, simply transferring assets to a Trust is not enough.  The documentation noting the transfer has to contain appropriate clauses to ensure full protection, and the Trustees of the Trust have to run it correctly.

Coming soon - setting up a Trust: getting started.

Janet Xuccoa is a Partner of Gilligan Rowe & Associates LP (GRA). She holds accounting and law degrees and is a well known author and presenter on trust and asset planning concepts. 

How blockchain will impact NZ’s economy
Distributed ledgers and blockchain are anticipated to provide a positive uplift to New Zealand’s economy.
25% of malicious emails still make it through to recipients
Popular email security programmes may fail to detect as much as 25% of all emails with malicious or dangerous attachments, a study from Mimecast says.
Human value must be put back in marketing - report
“Digital is now so widely adopted that its novelty has worn off. In their attempt to declutter, people are being more selective about which products and services they incorporate into their daily lives."
Wine firm uses AR to tell its story right on the bottle
A Central Otago wine company is using augmented reality (AR) and a ‘digital first’ strategy to change the way it builds its brand and engages with customers.
DigiCert conquers Google's distrust of Symantec certs
“This could have been an extremely disruptive event to online commerce," comments DigiCert CEO John Merrill. 
Protecting organisations against internal fraud
Most companies tend to take a basic approach that focuses on numbers and compliance, without much room for grey areas or negotiation.
Telesmart to deliver Cloud Calling for Microsoft Teams
The integration will allow Telesmart’s Cloud Calling for Microsoft Teams to natively enable external voice connectivity from within Teams collaborative workflow environment.
Jade Software & Ambit take chatbots to next level of AI
“Conversation Agents present a huge opportunity to increase customer and employee engagement in a cost-effective manner."