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SECURED EQUITY SOLUTION

TAX-EFFECTIVE ASSET PROTECTION FOR AT-RISK INDIVIDUALS

The Secured Equity Solution (SES) is an asset protection strategy provided to you in conjunction with law firm AJ & Co, which is designed to better protect the valuable assets of at-risk individuals from potential creditors.

This strategy has advantages and disadvantages, and whether it is suitable for your client will depend on their particular circumstances. To make it easier to determine if this solution would be advantageous for your clients, we have created an online Fact Find for you to complete, following which, the lawyers from AJ & Co will call you to discuss the suitability of a SES for that client.

Learn more at our complimentary webinar
Complete our online Fact Find

Request further information on this strategy

Complete the following form to receive a call-back from a lawyer at AJ & Co regarding the Secured Equity Solution
  1. Your Name(*)
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  2. Your Company Name(*)
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  3. Your Email Address(*)
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  4. Your Phone Number(*)
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  5. Security Code
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HOW DOES THIS STRATEGY PROTECT EQUITY?

The SES provides protection by effectively converting the at-risk individual’s equity in their valuable assets to a liability owed to a special purpose protection trust (Protection Trust).

Once implemented, the value of the at-risk individual’s equity becomes a loan from the Trust to the individual and the at-risk individual’s valuable assets secure the repayment of that loan (e.g. registered mortgage and/or registered security interest).

In the event that the at-risk individual is sued and a creditor obtains a favourable judgment, the equity secured by this strategy will usually be unavailable to satisfy that judgment.

HOW DOES THE SECURED EQUITY SOLUTION WORK?

download Download the Secured Equity Solution Fact Sheet

Assume Emma is at at-risk individual who holds an investment property worth $1,300,000. A mortgage of $600,000 is owed to a financier.

STEP 1 - Emma gifts the amount of her equity ($700,000) to the trustee of the Protection Trust

STEP 2 - The Trustee then loans that $700,000 back to Emma and takes a second mortgage over her property for repayment of that loan

NO STAMP DUTY OR CGT

As the individual is not required to transfer their valuable assets to any other party under the SES, stamp duty, CGT or income tax implications will not usually apply.

ADVANTAGES

  • Asset protection is significantly improved
  • CGT, stamp duty and income tax should not arise
  • Equity protected by SES can be "topped up" or released in the future
  • Can be integrated into the individual’s estate plan

DISADVANTAGES

  • Bankruptcy clawback provisions may apply
  • Eligibility for small business concessions may be affected
  • Existing financiers may request a deed of priority

FEES & ORDERING

Complete our online Fact Find

The documentation and advice for this solution is provided by law firm AJ & Co, one of the law firms on the Topdocs legal panel.

To submit a request for a SES, you will need to complete our online Fact Find, which outlines the key information required for AJ & Co to determine if this strategy is suitable for your client.

Following completion of the Fact Find, a lawyer from AJ & Co will call you and discuss the strategy in line with your client’s circumstances.

If your client proceeds with the SES, you will engage with AJ & Co directly, who will undertake the following for your client:

  • Meetings with clients
  • Resolutions/Promissory Note/Statement of Solvency
  • Letters/correspondence with financiers, accountants
  • Preparation of Deed of Gift
  • Preparation of Loan Agreement
  • Preparation of Mortgage / Security Agreement
  • Lodgement with titles registry
  • Lodgement of security interest with PPSR
  • Letter of advice (including signoff on each)
  • Any other steps to complete the engagement

The total fee for the solution charged by AJ & Co starts at $4,598.00 including GST.