legal tip 24: Spouses and Law

Discussion in 'Legal Issues' started by Terry_w, 12th Jul, 2015.

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  1. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

    18th Jun, 2015
    Spouses and Law

    Not many people realise that one spouse can lend to another - whether married or defacto. Spouses are not one unit in law in Australia, but are still separate legal entities which are able to contract with each other. If one spouse becomes bankrupt this won’t directly impact the other spouse. It may indirectly affect - especially if half of the house is taken.

    Spouses often come to be thinking they can have one will between them = you cannot. Each spouse has to dispose of their own assets. Each of them can have an identical will if they choose to (other than the names), but one spouse cannot force another as each must decide who to leave their assets to.

    Since spouses generally trust each other, more than strangers, there are various strategies in law and tax that can be implemented.

    The law strategies can improve asset protection, prevent assets falling into the wrong hands at death, prevent control falling into the hands if the principal is incapacitated etc.

    The tax strategies can help the family unit save tax now by diverting income to the lower income earner and they can ‘manufacture’ extra tax deductions to enable the higher income earner to claim more expenses.

    There are also borrowing strategies to assist couples to borrow more if structure right.

    Combining these strategies can help the family reach the end game sooner (retire etc) and help to keep assets in the family if things go wrong.

    I can elaborate further in future threads.

    its all about structuring.
    PacMan likes this.