Protecting your wealth

Tips on how to protect your money and wealth

How to protect yourself from creditors, business or relationship partners when it comes to the money you earn and the wealth you are building. |

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Most women are only the second or third generation who have earned their own money and who are building their own wealth. For this reason, many women are a little in the dark about how they can protect themselves financially.

Only 100 years ago, women were only just getting the right to vote or to be elected to parliament, and it still wasn’t until 50 years ago that we started to have some control over our own bodies by the legalisation of the contraceptive pill. So we haven’t had many decades to practice protecting our wealth yet.

So here are some areas in your life that you should consider protecting yourself:

From a business partner

I’m sure you have a great relationship with your business partner … at the moment. But over the years, you could start having differences of opinion. 

It is fairly simple to put an agreement in place between you, which could save you a lot of time and money in the long run. And it could save you the business, too.

It’s best to have a Partnership Agreement or Shareholder Agreement from as early in your business as possible. 

From a spouse

It may not be as important to consider a pre-nuptial agreement if you and your partner are both young and haven’t started saving yet.

But if either of you are entering into a second marriage, or either of you have some assets already, then you should consider protecting your assets in case your relationship fails.

In Australia, pre-nuptial agreements are called Binding Financial Agreements, and they don’t have to be made before a marriage.

They can be made at any time during a relationship. If one of you gets an inheritance, or contributes more to the relationship than the other, then you may want to consider making an agreement to protect your assets in case you break-up. 

From creditors

There are smart ways of building your investments in a way that protects them. If you run a business, or if you are in a profession where you could be found personally negligent, you will want to make sure your wealth is not at risk if someone sues you. 

When looking to invest in a protective way, get advice from a financial planner about certain investments products that could be available to you. 

Or an alternative is to see whether a family trust would be suitable for your investments.

From friends and family

Never lend money to family or friends, without an agreement in writing for them to pay you back.

If you don’t have an agreement in writing, which includes the amount and when they have to repay you, then you are unlikely to get the money back. It will be considered a gift, if they refuse to pay you back, and you tried to recover it through a Court.

A simple loan agreement of one or two pages is all you need to protect any money that you lend to family or friends.

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