Where you may be now
Plan early: it cannot be done at the last minute.
Many clients first think about protecting their assets when a relationship is already in difficulty. By then, most options are gone. The court has wide powers to look through structures, treat trust assets as property, and set aside transactions designed to defeat a claim. Moving assets after problems emerge rarely works, and often backfires.
Done in advance, however, asset protection is legitimate and effective. It gives founders confidence that their business will not be forced into a sale. It gives parents confidence that money intended for their child and grandchildren stays in the family. And it gives couples the security of having agreed, while they still agree on everything, what would be fair.
How the law works
The limits the law sets
In property proceedings under the Family Law Act 1975 (Cth), the court considers the property of both parties, however it is held. Three principles shape asset protection:
- Control is what counts
The High Court has confirmed that where a party effectively controls a discretionary trust, the trust's assets may be treated as that party's property. Structures controlled by third parties are more likely to be treated as financial resources, which the court considers but cannot directly divide. - Substance over form
Loans that were never intended to be repaid, sham arrangements and paper transactions are treated according to their reality. - Transactions to defeat a claim can be set aside, and injunctions can prevent dealings with assets before orders are made.
Within those limits, a binding financial agreement is the most direct form of protection: if it is valid, the court cannot make property orders inconsistent with it.
Tools that work
An asset protection plan
| Tool | What it does | What it cannot do |
|---|---|---|
| Binding financial agreement | Sets the division of property in advance; binding if valid | Bind parenting; survive defects in process |
| Documented family loans | Establishes a genuine debt repayable to parents | Convert an undocumented gift into a loan later |
| Third-party-controlled trusts | Keeps family wealth outside a party's direct control | Guarantee the trust is ignored in a settlement |
| Shareholders' agreement | Protects the business and co-owners from forced changes | Remove the shareholding from the property pool |
| Wills and testamentary trusts | Protects inheritances for the next generation | Override a valid claim on an estate |
For families with a business, protection often works across generations: parents structure their own affairs and estate plans, the business adopts clear shareholder arrangements, and adult children entering relationships make financial agreements. We coordinate each element with your accountant and financial adviser so the pieces fit.
How we help
Open, lawful and effective
We do not help anyone hide assets. What we do is help clients arrange their affairs openly and in advance, in ways the law recognises. That approach protects you twice: it achieves the outcome you want, and it means your arrangements will withstand scrutiny if they are ever examined.
Start with our pages on binding financial agreements and wills and estate planning, or read family trusts and divorce.
Last reviewed 27 September 2026 · General information only, not legal advice