Strategies for Effective Asset Protection in Family Businesses

For owners of family businesses, safeguarding your assets is paramount. This article explores effective legal strategies and structures designed to shield your wealth from an array of risks – be they commercial, financial, environmental, or stemming from personal relationships. 

  Assessing Your Asset Landscape: A Foundation for Protection 

The most effective way to protect your assets is to get professional advice on the tax and legal implications of using particular structures and a formal review of your wealth, succession, and estate plans. 

  Understanding what you own and control, and what risks your assets are exposed to is the start of assessing your current position. This is the foundation for an improvement plan that may involve moving assets or changing investment and/or business structures and, at times, triggering tax costs as a manageable cost today that may provide longer term value and reduced risk. 

  While insurance is an important component of your risk management strategy, effective investment and business structures are your first line of defence. Assets owned in your personal name are particularly vulnerable to risk or loss, these may be better protected without triggering tax and duty costs with the right asset protection advice. 

 Strategic Structures: Building Your Lines of Defence 

Trusts offer an effective asset protection structure as the assets are owned by the trust, and the trust is controlled by an individual (or individuals) with no personal ownership. Trusts can be fixed or discretionary, and generally offer reliable asset protection but may, in some circumstances, not provide an optimal tax outcome. 

  Companies are also an effective asset protection structure but as they are a separate legal entity and capable of being sued, it is important to have the roles of director and shareholder filled appropriately as these roles carry both risk and value. Companies in conjunction with a trust as shareholder, are a very effective asset protection structure. 

  Often asset protection means having assets and risk in separate legal entities, for example farmland owned in a land trust, and the farm trading enterprise operated out of a company. With this simple structure the trading risk is separated from the large land asset, limiting the liability of the trading risk to the company. 

  Limiting the roles within structures is also important. For example, if a husband and wife were the owners of the farm enterprise, the company can have a single director (rather than both) to limit the risk. 

  Asset Protection is a Continuous Journey 

Asset protection is an ongoing journey requiring regular reviews and is not a ‘set and forget’ exercise. Your wills and estate plans are an important part of the overall picture as are succession plans for control of companies and trusts. Any significant business or life event, such as a large asset purchase, should serve as a trigger to review your organisational chart, assets, ownership, and risks. 


 Thorntons is an accounting and advisory practice specialising in mid-size, family-owned businesses in Western Australia. We offer a fully integrated portfolio of financial, tax, succession, and estate planning services and have the experience to guide you through the complexity so that you can enjoy stability, peace of mind and certainty. 

  To discuss your individual business needs and find out if we might be a fit for you, please contact Thorntons at or call (08) 9421 1722.