Australia PPSR , Asset Protection & Estate Planning www.assetandpropertyprotection.com.au Alex Tees, Tel 612 92813230/617 4033 7652 61 409813622 atees@legalexchange.com.au

1. www.assetandpropertyprotection.com.au
Skype alextees 02 92813230/07 4033 7652
www.gblegalservices.com

2.  No person should rely on any part of the contents of
this presentation without first obtaining advice from a
qualified professional person. This presentation is
given on the terms and understanding that the author
is not responsible for the results of any actions taken
on the basis of information in this presentation, nor
for any error in or omission from this presentation.
The author hereby expressly disclaims all and any
liability and responsibility to any person, whether a
purchaser, recipient or reader of this presentation or
not, in respect of anything, and of the consequences
of anything, done or omitted to be done by any such
person in reliance, whether wholly or partially, upon
the whole or any part of the contents of this
presentation.

3. Useful Web Resources
 www.probatewilllawyersaustralia.com
 www.trustdeedregister.com (& au)
 www.assetandpropertyprotection.com.au
 www.ppsr.gov.au
 www.yourfinancialpartner.com.au

5.  The Personal Property Securities Bill 2009
and the Personal Property Securities
(Consequential Amendments) Bill 2009
◦ passed by both Houses of Parliament on 26
November 2009.
◦ Commencement date 30 January 2012 .
◦ The PPS Act is now in force with a two year
transitional period to 30 Jan 2014.

6. Personal Property Securities Act 2009
 Aim of the legislation is:
◦ to bring an end to the inconsistent and
◦ duplicate laws and registers.
◦ govern personal securities law Nationally
* Allow registered charges/mortgages over
personal property,(EG vehicles,Equipment,
Crops, animals ,Companies NOT LAND
◦ It replaced 70 Commonwealth and State Acts,
administered by 30 government agencies

7.  Up to 30 existing federal and state registers
transferred to the PPS Register, including:
◦ ASIC register of company charges
◦ co-operatives register of charges
◦ bills of sale ( finance security-personal property)
◦ motor vehicle securities
◦ ship mortgages
◦ crop liens
◦ stock liens ( stock agistment)
◦ register of trade marks

8.  On the PPS register, the end time for the
security must be defined, in particular:
◦ goods used by consumers - security can‟t be for more
than 7 years (but can be renewed)
◦ motor vehicles - security can‟t be for more than 7 years
(but can be renewed)
◦ BUT no stated end time needed for company charges
 is be wholly electronic
 Accessible 24/7 www.ppsr.gov.au

9. PPS Register
 Key differences to current position:
◦ Operates on the basis of notice rather than document
registration
◦ Registration is by „financing statement‟
◦ Notice can be registered before any secured transaction
takes place
◦ One registration can cover multiple security interests

10. Registration
 Not mandatory to register security interests
 No time limit for registering
 PMSIs (Purchase Money Security Interests)
to be registered within 15 days
 However failure to register/perfect will have
consequences for enforcement and priority

11. Electronic Searching of the register
 PPS Register can be searched by grantor details
or property details (if there is a serial number on
the particular property)
 PPS register will be maintained by ITSA
 OLD registers transferred and verified

12.  Unlike current company charges - copies of the
security documents are not included in the
register
 Information is included via the financing
statement
 Interested persons will be able to receive a copy
of the security agreements from the grantor
within 10 business days of a request being made

13.  Only authorised users can access the register
e.g. credit providers and current and potential
security holders
 To protect privacy there will be no general public
access except for authorised purpose – but may
be difficult to police

14. Personal Property means property (including a
licence) including:
◦ tangible items such as:
◦ cars, boats, aircraft,
◦ livestock, crops and minerals
◦ that have been extracted in any form intangible items
such as
◦ intellectual property and contract rights,
◦ designs, patents,
◦ plant breeders rights and
◦ trademarks financial property such as currency,
◦ A document of title, investment instruments and
negotiable instruments.
◦ investment entitlements (e.g. stockbroker accounts)

15. It specifically excludes;
 land
 fixtures
 water rights
 a right entitlement or authority (including access
entitlements) that is granted by or under a law of
the Commonwealth, a State or Territory declared
by that law not to be personal property for the
purposes of the Act

16. What is personal property security
 Three elements ;
◦ an interest in relation to personal property provided for
by a transaction that, in substance, secures payment or
performance of an obligation
 This is regardless of the form of the transaction
or the identity of the person who has title to the
property

17.  Charges that secure obligations - no distinction
between fixed and floating charges:
◦ Retention of title arrangements
◦ Chattel mortgages
◦ Lease of goods
◦ Hire purchase agreements
◦ Consignment

18. Form of documentation
 There is no prescribed form of security
agreement:
◦ General security agreement
◦ Specific security agreement
 All security is effectively „fixed‟ - parties need to
agree to terms of security arrangements
 Parties to determine when the property can be
disposed of by the grantor
 PPSA determines how current fixed and floating
securities are dealt with in future

19. Entities covered
PPSA applies to security interests granted by -
 corporations
 partnerships
 managed investment schemes
 registrable and non registrable legal entities
 Individuals (may be especially useful for
families to protect their money/property
loaned to businesses)

20. Creating a security interest
◦ Step 1 – entering into a transaction
◦ Step 2 – attachment of the security interest to the
personal property (enforceable against the grantor)
◦ Step 3 – possession, control or written security
agreement (enforceable against third parties)
◦ Step 4 – perfecting the security interest

21. Attachment
 A security interest attaches to personal property
when the grantor has rights in the collateral*
that are transferrable to the secured party and
the secured party gives value in return for the
security interest
 Collateral is the personal property to which a
security interest is attached

22. Attachment
 For an attached security interest to be
enforceable against third parties, section 20 of
the PPSA requires that either the collateral is in
the possession of the secured party , the
collateral has been perfected by control or the
grantor and the secured party have entered into
a valid written security agreement
 It is contemplated that security agreements can
be entered into electronically

23. Perfection
 Perfection is required to obtain priority over another
security interest, or survive a dealing in the same
collateral.
 The main methods of „perfection‟ are (section 21)
taking control of collateral that is controllable
property (e.g. bank accounts, investments)
registering a security interest in the collateral taking
possession of the collateral or temporarily perfecting
a security interest in the collateral

24. Control
 Controllable property is defined as :
 an investment instrument
 an ADI account (e.g. bank account)
 investment entitlements
 investment instruments (e.g. shares)
 letters of credit
 negotiable instruments not evidenced by a certificate
 (e g bills of exchange)

25. A perfected security interest will have priority
 over an unperfected security interest – section55(3)
 Example :Atherton Cranes Pty Ltd (ABC) grants a
security interest in one of its cranes to Cth Bank
Company later grants a security interest in the same
crane to Westpac
 Westpac registers the crane on the PPS register,
Commonwealth Bank does not the security interest
held by Westpac will have a higher priority

26.  A security interest perfected by control (of
controllable property) will have priority over a
security interest perfected by any other means –
section 57(1) example (investment instrument)
Atherton 24/7 borrows $20,000 from ANZ to invest in
a pizza oven and grants ANZ a security interest in
shares issued by Macquarie ANZ perfects its security
interest by registering the shares on the PPS register
 A 24/7 later borrows another $25,000 from Westpac
and grants Westpac a security interest in the same
shares issued by Macquarie

27.  Westpac perfects its security interest by taking
control of the shares Westpac‟s security interest
would have priority over ANZ‟s interest because
Westpac has perfected its interest through control,
while ANZ has perfected only by registration
 Where competing security interests are both
perfected by control, priority is determined by the
order in which the secured parties took control of the
collateral – section 57(2)

28.  Priority between security interests perfected by
means other than control is also determined by the
first in time principle – section 55(4)
 It is necessary to determine the priority time the
priority time will not necessarily be when the security
interest was perfected

29.  Providing a security interest is continuously perfected,
the priority time will be the earliest of:
 registration on the PPS register
 possession of the collateral
 when the interest is temporarily perfected by force of
the PPS Act

30.  Priority between unperfected security interests is
determined by the order of attachment of the
security interest – section 55(2)

31.  Exceptions to the general priority rules –
 Purchase money security interests (PMSI)
 PMSI is essentially where the secured party has
provided finance or given value required by the
grantor to acquire the collateral, (e.g. vendor finance)
 PMSIs have „super-priority‟ over the same collateral
(which has been granted by the same grantor) which
has been perfected by registration or possession
however, a security interest which has been perfected
by control has priority over a PMSI

32.  Enforcement and remedies
 Chapter 4 PPSA governs the enforcement of security
interests
 Any secured party regardless of priority ranking, may
enforce its interest
 Secured parties are not required to obtain judgment
prior to enforcement
 The PPSA is not a code and will be able to be used in
conjunction with other rights and remedies available

33.  Important rules regarding enforcement
 A general standard of honesty and commercial
reasonableness is to apply to enforcement actions
 Parties can contract out of enforcement provisions
(depending on use of collateral)
 May use land law to enforce security interest in some
circumstances
 May seize liquid assets from third party

34.  Seizure of collateral
 Secured party may seize collateral by any lawful
method
 Higher ranking priority holders may seize collateral
from lower ranking priority holders
 Higher ranking priority holder must pay enforcement
costs of lower ranking priority holder where lower
ranking priority holder initially seized the collateral

35.  Disposal of collateral
 Three methods of disposing of collateral:
◦ sale to a third party
◦ sale where the collateral is purchased by the enforcing secured
party lease or license to a third party
◦ Must obtain market value for collateral or best price reasonable
same duty required as a controller under Corporations Act

36.  Retaining collateral
 Secured party may retain collateral if it is not
predominantly used for a personal, domestic or
household purpose
 Retention of seized collateral is not an absolute right
 The grantor and other interest holders may object –
in which case collateral must be sold

37.  Proceeds must be distributed in accordance with
the provisions in section 140 PPSA Statement of
account must be provided within 20 business
days of a request to do so

38.  There is a right of redemption available to;
 the debtor, the grantor and higher ranking secured
creditors.
 Redeemer must pay the amount required to discharge
the obligation
 Reinstatement is allowed prior to the exercise of
enforcement.
 Achieved by paying amount of arrears and any
enforcement costs

39.  Any existing security interest that is not migrated to
the PPS register after commencement of the Act will
be deemed „temporarily perfected’.
 Applies for the period starting immediately before the
registration commencement time and ending on the
earlier of the time when the security interest ceased
to be continuously perfected otherwise than by
temporary perfection the end of the month that is 24
months after the registration commencement time
 After the 24 month transitional period ends, the
priorities will be determined under the substantive
provisions of the legislation

40.  Be aware that old Retention of title clauses in sale
contracts may not work without PPSR Registration
 Review and revise Contract Documentation.
 Families/Lenders/Business Owners need to consider
whether to register their loans/interests in
Companies/Businesses in order to protect their
money/property.
 Contact : Alex Tees Mob 0409813622
 Phone : 07 4033 7652/02 9281 3230
 Email: atees@legalexchange.com.au

42.  No Will/Intestacy :means you don‟t choose who
receives your property/assets ;
 - The Succession Act Formula will apply
 Intestacy = 3 x amount of delay + Costs!
 Spouses/Children suddenly have no money
 Super‟ Pay outs delayed
 Solutions ; see a Lawyer get a Temporary Will Form
Done ! Incapacity – Powers of Attorney (Wills only
operate after death !) (Call us 24hrs!?)

43.  Due to increasing complexity in family relationships
and business/investment structuring, along with
complicated tax and legal regimes - modern estate
planning, done properly, must encompass issues such
as :
 Efficient intergenerational transfer of wealth with
harmony
 Asset protection (Keeping out “Predators/Creditors” &
Keeping the Wealth in the Family )
 Tax (at both State and Federal level)
 Superannuation (Formation + Review of Deeds)
 Trusts, (Formation + Review of Deeds) – safe storage
(www.trustdeedregister.com (.com.au) – registration ?
 Investments/insurance structuring
 Resolution of disputes and other issues through the use
of an “Independent Referee” – Dispute Resolution

44.  Provision of strategies and advice in collaboration
with other professionals ( Accountants/Financial
Planners) to deliver the optimum outcome(s) for
client (s):
 Modern Estate Planning Strategies
 ( Before and after death )
 Testamentary Trusts ( Trusts created after death)
 Family Trusts
 Self-managed superannuation funds (SMSF)
 Business succession planning.(a “will” for a
Business )

45.  Timeframes agreed with client and referrer at each
stage to ensure efficient completion and
accountability
 Fixed Fees or a fixed range of fees & the First
meeting with client(s) is purely a scoping exercise &
obligation free ( often in Accountants/Financial
Planners „ office )
 Collaboration/Reporting to Accountant/Fin‟Planner at
each stage = Further Fee & protection
opportunities..for you
 Systematic and efficient delivery ( x 3 Meetings)
 Technical and client-related queries welcomed from all
Referrers/Client(s)
 Referral to other Specialist Tax Services

46.  High level technical expertise in superannuation ,
taxation , and Trust law – Solicitor(s) should work
with and have access to the resources of Accounting
advisory firms.(throughout the World)
 Specialist Solicitors who understand and appreciate
the Financial planning process, work together with
Clients‟ Financial Planners & Accountants.
 Encourage First meetings/other meetings at Financial
Planners/Accountants‟ office and/or clients
home/office.
 Fixed price contracts (or Fixed Range) (Approx 75%
Tax Deduction)
 Comprehensive Estate Planning Portfolio / Folder.
 Delivery meetings can be Optional Family meetings
to include the children – builds bridges to next
generation

47.  Will Maker/Testator makes a Will to flexibly provide ;
 Optional Testamentary Trust or other *Structures
created after Death (*Note Tax laws may change !?)
 “Beneficiaries” Persons receiving Money & Property ,
receive it via a Trust of which they or their Nominated
Person become Trustee
 Provides Tax Efficiency and Asset Protection
 * If the law changes Provision for Other Structures
such as Partnerships, Joint Ventures and different
types of Companies/Corporations may be
necessary…..

48. EXECUTOR
(May not be the same Person)
TRUSTEE (S)
TRUST TRUST TRUST

49. Optional
Discretionary
Testamentary
Trust
!
WILL
Trustee
Tax savings,
especially for
minor
beneficiaries
Flexibility of
distributions
Asset protection
for trust
assets
Beneficiaries include:
( THOSE RECEIVING
GIFTS )
Primary Beneficiary
–Surviving
Spouse/Children
Family Members
Related Entities
Trustee -
Primary
Beneficiary
(Surviving
Spouse/
Children)
B
EXECUTOR

50.  Assets and Possible Family Situation
 ( Married or Unmarried)
 Possibly have one child
 Woman owns a House/Property
 Woman a High income earner/ & Wealthy
 Perhaps the Husband will never have a high income
earning capacity

51.  Protect the child if both or One Spouse dies
 Ensure Husband does not receive too much “loot”
from His Wealthy Wife if she dies first ? ( & Protect
the Child as well !)
 Ensure the Husband at least has a Roof over his head
and adequate provision while he cares for the child if
Wife dies before him…
 Ensure Equity & Sensitivity …………

52.  A Separate Care for the Spouse Trust for the Husband with
little wealth
 A Separate Trust for the Husband with sufficient
Money/Property
 A Separate Trust for the child with another relative of the
Wife as Trustee (Husband given right to occupy Family
Home for life ,while Child receives all the Wifes‟
Estate………)
 Recommend and Ensure the Husband owns Adequate &
generous Life Insurance over the Life of his Wife in case
she dies first…….
 * If the Partners are willing – Pre Nuptial/Post Nuptial
Agreements
 ( very sensitive issues here !) – Binding Financial
Agreements

53.  George 55, Marina 54 - both retired
 Children ; Jessica 27 (De Facto),
 Sarah , 22 (Married)
 Jack 21, (Has a Disability, numerous Partners)

54. Home Joint tenants
Investment
Property 1
Joint tenants
Managed funds SMSF (Self Managed Super‟
Fund)
Shares SMSF
Direct property SMSF

55. ESTATE PLANNING - Wishes & Concerns
 George to Marina and vice versa in the first instance
 Then equally to children
 Specific protection required for Jack due to disability
 Wealth to be retained in the family
 Derive some tax efficiency

56. Case Study 2 – George & Marina
“Estate Assets” Testamentary Trusts & *other
optional Structure (s)
Family Home Sever tenancy
Investment
Property 1
Sever tenancy
SMSF (Super
Fund)
BDBN (Binding Death Benefit
Nomination)

57. Concern Strategy
Protection of family wealth
from spousal and other
claims
Testamentary Trusts (TTs) & other
Structures with crisis provisions
(removal of Trustees, Directors,
“Controllers” etc)
Protection for Jack
- Control
- Conflicts of interest
Protective Trust
- „Family‟ control
- Testamentary Protector
Understanding of “non-
estate assets” and planning
required
Sever joint tenancy (Family Home)
Cascading Binding Death Benefit
Nominations (Super‟)

58. Concerns & Strategy
Maximise superannuation benefits during lifetime,
potential inability of survivor to recontribute to super
- Use “Reversionary” pensions
Optimising tax with protection
(*BDBN = Binding Death Benefit Nomination) - Cascading
*BDBNs
- first, reversionary
- then, *LPR
(* Legal Personal Representative )
Ongoing control of SMSF -Corporate Trustee appropriate ?

59. Concerns & Strategy (Wills may not Work!)
1) Transition of control of Family Trust -Trust Deed
Review
- Deed of Future Dealing / Alter Trust Deed ?
( to take in succession) see
www.trustdeedregister.com
2) “The Business” Release of value in the business
– how to pass on to family - “Buy/Sell”
Agreements ;
- Business Succession Agreement – “A Will for a
Business”
3) Superannuation Nominate LPR as beneficiary,
Insurance(s) Nominate LPR as beneficiary

60. FAMILY SITUATION
 Jack, 53 & Jill 49 - both still working
 4 children :
 Mark 23 … single (Jacks child first marriage)
 Steve 21 … single, (Jacks child first marriage)
 Marina 20 … De Facto (Jills child 1st marriage )
 Helena , Age 3 (Jack & Jills child 2nd Marriage)

61. Home - Joint tenants
Investment property – Joint Tenant
SMSF (Self Managed Super‟ Fund)
Shares SMSF

62. • Possible ESTATE PLANNING WISHES
& Concerns
• Jack to Jill and vice versa in the first instance
• Then equally to children
• Specific protection required for Helena due to young age
• Keep wealth in Family ;Wealth to be retained in the
family
• Derive some tax efficiency

63. Some Strategies :
1.Estate Assets Optional Testamentary
Trusts
2.Home - Sever Joint tenancy
3.Investment Prop - Sever Joint tenancy
4.SMSF (Super Fund) - BDBN
(Binding Death Benefit Nomination(s)

64. Concern Strategy
Tax efficiency Trust structure
- income splitting properties
- 102AG concessions for minors
Executors discretions
Ability for younger
beneficiaries to „fritter-
away‟ wealth
Qualifying Age – eg 25
“Young Mens disease”(beware
“young ladies disease” as well !)
Estate conflicts – Loans Equalisation provisions

65.  No two strategies are the same
 No two Testamentary Trusts are the same
 Strategy must be consistent and coherent across estate
and non-estate assets
 Must be a collaborative approach –Advisers/Lawyers
 Don‟t forget Enduring Powers of Attorney /Guardianship
 Specialist strategy and intellectual property – no „one size
fits all‟
 REGISTER WILLS /Store Register Trust/SMSF Trust Deeds

66. Any Questions ?
Contact Alex Tees, skype alextees
Mobile 0409813622
Cairns 07 4033 7652 (QLD)
Sydney 02 9281 3230 (NSW)
Email atees@legalexchange.com.au
Twitter “EstatePlanAussi”
Process ; www.assetandpropertyprotection.com.au
1) Get Facts Straight – List Assets/Property
2) Compare Notes with Clients Accountant,
Financial Planner
3) Interview to Confirm instructions
4) Explanation/Signing Interview
5) Optional Family Meeting ?