Equitas Partners manages risk with resilient asset structuring and a long-term strategy for financial security
Risk management is about prudent decision-making, suitable structures and outsourcing risk through appropriate insurances.
The underlying objectives of asset structuring are:
- To generate wealth
- To quarantine assets to ensure that they remain available to you
- To avoid exposing your assets to the risks of the commercial world, differing needs of family members or excess tax paid both now and in the future
- To separate commercial risks from personal risks.
Asset structuring ensures that the correct assets are held by the correct structure, often including the creation of company or family structures within which those assets will be held. This ranges from assets to fund retirement held in superannuation funds to business assets (such as property, goodwill and intellectual property) retained in trust funds separate from the trading business. It could also be as simple as a separate bank account held in the name of a spouse.
While each requirement is different, the purpose of the asset structuring process is to provide the appropriate balance between flexibility of use and the protection from the interests of creditors, excess taxes, spendthrift or unscrupulous family members, tax advantages, family law and the longevity of assets.
Quarantining personal assets from professional or commercial risk is important when one is a company director or officer, or when contemplating the transition to directorship or business ownership.
In many instances, risk management is not complicated. Moreover it is the simple ownership of the right documents in the event that the asset owner becomes incapacitated through injury or illness (such as a Living Will) and ensuring that Power of Attorney is with a trusted person.
But the most effective way to manage risk is to maintain a solid financial strategy and insurances that stay intact regardless of changes to employment circumstances, redundancy or other unforeseen financial obstacles and is resilient enough to withstand changes through the asset owner’s career transition.