Do you have your family home in a trust?
The building industry is a risky one. The chances of you getting into financial or legal problems are higher in the building trade than in most other businesses. I am not saying that will happen to you, but in view of the higher risk profile you should take all the necessary steps you can to protect yourself and your family. That includes putting your family home into a trust.
Trust have been round for centuries. They are primarily a way of shielding private assets from the reach of creditors, should something go wrong with the business and people are looking at you personally to pay up. Remember those personal guarantees you signed way back when you first set up trade accounts with suppliers? Your limited liability company status won’t help you if those personal guarantees are enacted.
It used to take years to fully “gift” the value of your home to the family trust, but not any more. It can be done with one strike of the pen, however doing it AFTER you find yourself in trouble may be challenged. The best idea is to do it ASAP after going into business. The longer your home is in there and longer the trust has been running, the more secure it is likely to be. This assumes you have been keeping the trust documents up-to-date and fulfilling any reporting requirements with the IRD.
I am not a lawyer, so don’t take the above as legal advice. It’s just common sense. If you haven’t set up a family trust to protect your private assets (maybe even the boat) then you should talk to your lawyer about doing it. Chances are you won’t every need the protection it affords, but if you ever find yourself up to your arse in (creditor) alligators, you will be thankful for the time you took in organising this.
If you don’t have a lawyer drop me an email HERE and I will refer you to one.