‘Cleaning up’ Your Affairs- Gifting, Relaxing Debts, Leases and Trusts
Gifting and Forgiveness of Debt
In general terms, the goal or purpose of gifting is to transfer ownership of an asset to another person or entity. This is usually done for creditor protection. Again, in these uncertain times, if you are at risk of becoming insolvent or bankrupt, you should seriously consider whether or not you ought to gift any of your assets to another person.
Merely transferring an asset may not provide sufficient protection if the worst was to occur. Before making that decision, you ought to obtain the advice of an experienced solicitor who can guide you through the potential hazards and other risks associated with transferring assets. There are a number of risks that, if not properly considered, could leave you worse off than if you had kept the asset in the first place.
You may be in a position to forgive a debt to someone who owes you money and has fallen on hard times. In short, not require the repayment of a loan you have given to someone. Before doing so, you ought to obtain legal advice as to the implications of this action on your solvency both personal and in business and how this may affect you/your business. Simply forgiving the debt may place you in an unsavoury position.
For those who are in receipt of the old aged pension, gifting assets may have Centrelink consequences.
As a lessor you ought to review your current lease documents and make sure that you have diarised all lease renewal and rent review dates to ensure that those very important dates are not missed.
If any of those dates have already passed and the lease arrangements remain in place, it is likely to be on a monthly basis with either party having the ability to terminate the lease with one month’s written notice. This does not provide any financial certainty moving forward. In these uncertain times, financial certainty is essential.
If you have any tenants who are currently in place on a monthly basis, now is the time to ensure that a new lease has been entered into or the renewal of an existing lease has been signed.
Are you the trustee or one of a number of trustees of a trust? A director of a corporate trustee? If so, you have some very serious obligations prescribed by legislation to ensure that you protect the assets of the trust for the benefit of the beneficiaries. This includes ensuring that any decisions made in relation to a trust has been minuted and signed by all trustees. Are these documents up-to-date?
If the affairs of a trust were to be questioned in the future, it is very important to ensure that all decisions have been documented and that all records evidencing the decision making process are up to date.
To find out more contact one of our friendly staff at Bambrick Legal today:
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