• The family home is the most obvious asset to remove from personal ownership: however there are Capital Gains Tax and stamp duty considerations. A personal residence is exempt from CGT but transferring it to a company or trust will lose its exemption.  In some circumstances the transfer of property from one spouse to another is stamp duty exempt but only where married partners have entered into an agreement to divide assets sanctioned by the Family Law Court.
• A common asset-holding entity is a discretionary trust established for the benefit of a business person's family. This structure is relatively flexible and in the event of bankruptcy the business person's beneficial interest is ordinarily not property that can be claimed by a trustee in bankruptcy. The timing of creation of the trust and the manner of accumulation of assets in the trust are critical considerations.
• Valuable personal belongings such as jewellery, antique furniture, shares and other investments can be transferred to a spouse who is not open to increased risk , a trusted relative or corporate/trust entity. Again, tax and stamp duty considerations apply.
• Superannuation is integral to an individual's long-term financial well being. Care needs to be taken so that superannuation funds are not payable or paid out before the date of bankruptcy.
• The aim of asset preservation is to ensure that family assets are owned and controlled by a person or entity that is not susceptible to creditor's claims. It would be futile to place assets in the name of a spouse who has given co-guarantees and could also be bankrupted.
• It is essential to review wills to ensure that the person seeking protection does not stand to receive assets on the death of a family member.
• Despite many people's fears, there is generally protection in case of marital breakdown. Assets generated during a marriage are subject to the operation of the Family Law Act and people divesting assets can rely on the Family Court to alter property interest in their favour if the marriage is dissolved.
• Any of the above transfers are only beneficial in a bankruptcy context so long as the appointed trustee in bankruptcy is unable to show that the purpose of the transfer was to put the relevant assets beyond the reach of creditors, at a time when the business person knew or should have known that he/she was unable to pay all of their debts as and when they fell due.

Disclaimer: This is not advice. Items herein are general comments only and do not constitute or convey advice per se. The information contained in this article is for guidance only and should not be relied upon without obtaining professional advice having regard to your specific circumstances.
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