Liz Koh: Review wealth 'storage' constantly

Review where you keep your money regularly.

Tax, estate planning and asset protection are all important considerations. The assets you own are your store of wealth. These can include your home, investment properties, bank deposits, KiwiSaver, superannuation funds, investment portfolios and businesses. When you are starting out in life, it is easiest to buy assets in your own name but for most assets there are other options. Ownership options for personal assets can include:

Individual ownership:

Your assets are held in your name and you are liable for any tax payable in relation to the assets. On your death, they pass to your estate.

Joint ownership:

You share the ownership of the assets equally with another person or entity. On your death, ownership transfers to the surviving person or entity. Tax liability is shared by the owners.

Tenants in common.

Two people own a property in equal shares or shares of different sizes, for example, 60 per cent and 40 per cent. If one owner dies, that owner's share passes on to whomever they have chosen to inherit it.

Family trust:

A family trust is a legal way for you to hold assets for the benefit of you and your family over the long term. The assets are owned by trustees for the beneficiaries (usually you and your family). There are many reasons to consider a trust, mostly aimed at protecting your assets -- from creditors, the threat of estate duty and relationship property claims.

For business assets, ownership options include sole trader, partnership and limited liability company. As your wealth increases, there may be benefits from using different forms of ownership.

It pays to think ahead and decide on which ownership structures are best suited to your circumstances because changing the ownership of assets can be costly.

Tax, estate planning and asset protection are all important considerations.

Your solicitor and accountant can advise you on the advantages and disadvantages of the various options.

Liz Koh is an authorised financial adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free by calling 0800 273 847. For free e-books see moneymax.co.nz and moneymaxcoach.com