An Affordable Second Line of Defence

John Shingleton

Director of Onlinelawyers
www.onlinelawyer.nz
Since the passing of the new health and safety legislation, many clients have sought advice on how to minimise the potential implications of a health and safety prosecution.
In particular, directors of companies who are personally exposed under the “due diligence” provisions of the legislation are seeking how to protect their family assets.
When asked, my first piece of advice is always to strive to be compliant with the legislation, and in particular the regulations.
But, accidents do happen and we do not live in a perfect world.
Because the new legislation provides for very hefty fines, depending on the gravity of the offending, there has been a renewed interest in Family Trusts.
Essentially, depending on whether you time and do it right, putting your family home into a family trust could protect your home against a successful Health and Safety prosecution.
Till just recently, famaily trusts had become a great source of revenue for some traitional lawyers. By creating red tape under the pretext of a necessary perfectionist process, these lawyers have been able to justify significant fees without any real market accountability.
Consequently, trust advice had become unattainable for many SMEs and micro businesses, due to an arbitrary high market price.
No more. To paraphrase an American lawyer who was making a general comment about the state of the US legal market, “the party is over”.
There is a quiet revolution going on in the New Zealand market as new businesses emerge. Most of these businesses are taking advantage of the cloud and applying a more client-focussed practical approach.
One of the more exciting businesses is TrustWorks. I recommend all readers take the time to look at their website.
TrustWorks will, in my opinion, render obsolete some of the expensive trust administration teams run by some traditional lawyers. (By way of disclosure I have signed up to TrustWorks and am in the process of uploading a number of trusts).
There are also a number of lawyer and non-lawyer businesses offering to set up trusts at a fraction of the price charged by traditional lawyers. The common features seem to be value-based fixed prices and a focus on practical outcomes, rather than perfection.
So, with the market entry of these new businesses, I predict the costs of setting up and administering a family trust will drop to a more affordable level.
By affordable, I mean to a level where SME’s and microbusinesses see value for money.
Have you considered an affordable second line of defence?