Know Your Rights: DG Institute and Dominique Grubisa (part 1)
Published 11:07 am 1 Feb 2021
Dominique Grubi…: company, then you have asset protection. In fact, this is a myth. And the worst thing you could do is think that you’re protected when you’re not. In this video, I’m going to show you why you aren’t protected by owning assets in different entities. I’m going to share with you how you can be protected, and I’m going to share with you why you should be able to buy in whatever entity you want, when it comes to tax efficiency and borrowing capacity.
Hi, I’m Dominique Grubisa. I’m a lawyer and I’m also an asset management specialist. In my work with thousands of investors, I found a common myth out there, where people think that they have to balance out when it comes to owning things, like property or other assets, business assets. They have to decide how they’re going to hold that asset. And they have to balance up, a juggling act between asset protection, taxation benefits, and the ability to borrow. So their mortgage broker might say, “Buy this property in your own name because the bank will approve a loan to you in your own name.” But then, their accountant says, “Oh no, you can’t own this one in your own name. For tax purposes, you should have it in a company or a trust.” And then, they think from a legal point of view, “Oh, well, I have to buy it in a trust because then it’s protected, and I’ll never ever lose it. And if things go wrong with my business, I’ll never ever lose my home.”
Unfortunately, from an asset protection point of view, owning an asset in a certain name or entity will never, ever protect you. So in this balancing act between tax borrowing and protection, I’m saying, take protection out of the equation. In this day and age, whether you earn something in your own name or a company or a trust, it can still be lost. The law is like a hot knife through butter when it comes to ownership. If you own in a company, you’ll be the director of that company, you will have given directors guarantees. And it opens up your personal wealth anyway. If you own in a trust, you’re a beneficiary of that trust. You have a beneficial interest in that asset and it’s exposed anyway. So it’s a myth to think that you to own a property or an asset a certain way to have it protected. There are other ways to protect your wealth and it doesn’t come through ownership.
So the good news is, is just focus on what’s right for borrowing purposes, whoever the bank will lend to, should be the one to own the property. Or for tax purposes, trusts are great for streaming income, as are companies when it comes to paying out dividends and maintaining profits and paying tax at the corporate rate. So do what’s right in terms of your mortgage broker and your accountant. Take asset protection off the table, because it doesn’t come through ownership. There are lots of other great strategies you can use. And if you want to know more, leave a comment below or contact us. And we can give you more information about how to structure your affairs, so that all of your wealth and assets are protected. And I look forward to talking to you in our next video.