Protecting Your Investment

Protecting Your Investment

The need to protect a family’s investments has always been very important. For hundreds of years people have wanted to safeguard their family’s assets from any risks and claims.

You will also want to make sure your wishes regarding your property are carried out on your death.

This section gives an overview on a range of options to protect your assets.

What to think about

In order to protect your property investment you need think about a number of issues which range from the method by which your title is held to the possible establishment of a family trust.

You should think about:

  • The nature of your employment and whether you are an employee, self-employed or an employer
  • Exposure to creditors
  • Your relationship: single, married, living in a de facto relationship,same sex relationship, or second and subsequent marriages
  • Whether or not you have children, and
  • Your hopes and aspirations.
  • In addition, the Property (Relationships) Act 1976 has had a major impact on all asset protection issues. It is a complex topic about which we need to talk with you face-to-face as one size does not fi t all. However, we provide a brief overview below.

Property (Relationships) Act 1976

The Act came into force on 1 February 2002, replacing the Matrimonial Property Act 1976.

It applies automatically to all people who are married, and to people who are over 18 years old and who have lived in a de facto relationship for at least three years. In some circumstances the Act applies to de facto couples who have been living together for less than three years, for example, where there is a dependent child. The legislation also applies to same sex couples.


When a couple separates, all property acquired during that relationship is, as a general rule, shared equally between them. The reasons why the relationship ended are not relevant to this equal sharing rule.

The relationship home and other family chattels, including motor vehicles and boats, are also shared equally after three years, even if they were owned by only one of the parties before the relationship began.

Equal sharing applies whether the property is owned in joint or individual names.

Equal sharing also applies in the event of one partner dying during the relationship. The surviving partner then has a period of six months to decide whether to accept the provisions of the deceased person’s Will, or to make a claim for an equal share of the relationship property under the Act. Wills need to be carefully considered in the light of this legislation.

What are possible solutions?

It is possible to ‘contract out’ of the provisions of the Act if it does not suit your individual circumstances or will lead to a grossly unfair situation. Any agreement however must be fair to the other party. You are required to get independent legal advice and sign the contracting out agreement for it to have legal effect. Some agreements can be quite complex, but time spent now can prevent tears, frustration and litigation later.

Family trusts also give some protection from the legislation.

Joint tenancy

‘Joint tenancy’ is a method of owning your home in conjunction with another person, whether or not that person is a partner or a spouse. On the death of one joint tenant, the property is automatically transferred to the survivor regardless of the provisions of the deceased’s Will.

Tenants in common

A property may be held as ‘tenants in common’. If one partner dies, their share does not pass automatically to the survivor (unlike a joint tenancy), but passes according to the deceased’s Will.
This ownership method is often recommended for partners or friends buying property together. It is also particularly important to think about this ownership structure when people want to reserve their share for their children (whether or not from another or prior relationship).


Joint Family Home

Having your home registered as a Joint Family Home (JFH) is a comparatively inexpensive method
to achieve limited protection against creditors’ claims. It is currently only available to married couples, and does not include couples who have a civil union. On registration as a JFH the property is owned by husband and wife as joint tenants. The registration is noted on the property’s title.

The main advantage of having a JFH is to provide protection for the home owners of up to, currently, $103,000 against ordinary creditors. It does not apply, however, against mortgagees.

The protection is granted immediately on settlement of the property as a JFH if the JFH application has been advertised (without any creditor lodging a caveat as an objection). If the application is not advertised, protection against creditors is deferred for two years from the settlement.

If your home is already registered as a JFH, when buying a new home it is possible to transfer the benefit from your current home to your new property immediately without having to advertise. Only one home can be registered as a JFH at any one time.

Family trust

Family trusts are the most commonly used method of asset protection and they are the best solution in many cases.

However, a family trust will only be recommended if it suits your individual circumstances. We can talk with you about your assets and liabilities so you can decide whether a trust is the best method to
protect your property.


If you are buying a home, it is essential you have a Will. You are the owner of a major asset and it is imperative that you leave instructions about what should happen to your property if you die.

Many people misunderstand what happens with the disposal of assets if someone dies without a Will (this is called intestate or intestacy). A Will ensures that your wishes are carried out subject to any possible claims that could be brought under the Family Protection Act 1955 and the Testamentary Promises Act 1949.


In addition, the Property (Relationships) Act 1976 has major implications for homeowners. It is essential that we talk about this while the property transaction is being prepared.

If you already have a Will, this is a good time to review it to ensure it is up-to-date and it still reflects your wishes.

Enduring Powers of Attorney

You should also make sure you have Enduring Powers of Attorney (EPA) so that in the event of an accident or some incapacity, decisions can be made about your welfare and/or property, and keep your affairs in order. There are two forms of EPA.

Power of Attorney in relation to personal care and welfare: This grants your attorney the power to act for you generally, although it may be restricted to defined specific matters such as a choice of rest home, medical care, etc. You can also place restrictions on your attorney, for example, ensuring that they consult with other family members before making final decisions.

There can be only one attorney (usually a spouse, partner or close relative) appointed in relation to your personal care and welfare.

Provision can be made in the document for an alternative if the first appointee dies or becomes incapable.

Power of Attorney in relation to property: This allows the attorney to act in relation to all your property, or to specific property. More than one attorney may be appointed.

The witnessing provisions for EPAs are complex; we will make sure that each EPA is signed and witnessed correctly.



Please contact Tina McLennan, Anna Ferguson or Jo McLennan for more information.