A large part of the job of being a lawyer is anticipating the worst case scenarios that clients can face in their lifetimes, and advising clients on the best ways to avoid or mitigate these risks.
While it may not sound like a pleasant mindset to have, it is sometimes a necessary part of the job to encourage clients to think about what could go wrong, especially when it comes to protecting the largest assets that they own.
For example, if you operate your own business, it would be considered unwise to own all of your assets in your personal name, and instead placing them in the ownership of a separate entity such as a limited liability company or a trust, which mitigates the risk of losing everything if the business goes south.
Most business clients would, at a minimum, put their family home in a separate trust, and ensure that the trust is not involved in any of the activities of the business, such as giving security to the bank for business loans.
A second example of protecting yourself is to think about what would happen in the event of a relationship breakdown with your significant other.
As I wrote about in my last article, lots of couples opt to sign an agreement between themselves while the relationship is going well, confirming what would happen to their assets in future if they were to separate.
For a relatively small cost, this can save a lot of time and much larger legal fees if there is a post-separation fight about the division of assets.
Another important aspect of asset protection is thinking ahead to what you want to happen with your assets when you die.
While not the most pleasant of topics, it is important to consider how you would want your assets distributed, and to ensure at a minimum that you have a will and keep it current at all times.
Another option is to establish a trust and record how you would want the trust to be managed if you pass away before all of its assets are distributed.
It is a real skill, whether it be in your professional or personal life, to be able to think ahead, assess risks and put a plan in place accordingly.
But having those discussions with your trusted advisers at the beginning can pay major dividends in the long run.
- Richard Small is a senior solicitor at Jacobs Florentine. The information above is general only and cannot replace specialist advice. The writer accepts no responsibility or liability for reliance on, or use of, this article.