practical steps to help protect your assets
there are a number of practical steps that can be taken to protect your assets including entering into a formal agreement with your partner (see 'formal agreements with your partner: cohabitation, pre-marital and financial agreements').
It is sensible to consider these steps on entering into a relationship. It is also advisable to review them on the occurrence of significant events in your relationship such as birth of children, purchase of property, receipt of significant gifts or other payments.
The best way to protect your assets will depend on your particular circumstances. Some of the steps below can have negative effects such as tax liability. We would recommend that you should seek legal and accounting advice before embarking on any particular course of action.
Practical steps to help protect your assets
- Keep your property and finances as separate from those of your partner as possible. Hold separate bank accounts.
- Contribute equally (or at least by clearly agreed shares) to household expenses.
- Avoid having your partner work in your business. If they do, pay them an appropriate wage to avoid subsequent allegations of their non-financial contributions to your business.
- Consider how real estate should be held eg solely, jointly or by a third party such as company or trust.
- Keep records of all financial transactions during the relationship.
- Keep assets held by you prior to the relationship in your sole name. Avoid selling such assets and rolling them over into jointly owned property. If you do, keep clear records of your contributions to jointly owned property.
- Keep lump sums of money received during the relationship in your name and avoid placing them into jointly held assets.
- If significant gifts or loans are received from family, document such gifts or loans at the time of receipt.
- Avoid accepting liability for debts of your partner. Avoid entering into joint loans, giving guarantees, being a partner or director in their business.
- Make a Will setting out what will happen to your property on your death.
- Consider whom you nominate as beneficiary of your insurance or superannuation policy.
Although these practical steps will not prevent a claim in respect of assets you bring into the marriage, it may assist with more clearly identifying your contributions, which is of importance when determining your entitlements.
Disclaimer : This article provides basic information only and is not a substitute for a professional or legal advice. It is prudent to obtain legal advice from a family lawyer.