Hi, Tara Lucke here. One of the things that has been coming up in my practice lately over and over again, which I thought I would do a video on, is the bankruptcy clawback rules. So, I do a lot of asset protection work and often we’re looking at strategies where we’re moving assets from one person to a related party. So, that might be transferring assets to a family trust or a low-risk spouse out of a high-risk person’s name. Now, moving assets out of people’s name isn’t effective asset protection strategy but we have this dark cloud hanging over our head which is the bankruptcy clawback rules. So, those clawback rules will apply to any transaction between related parties and the clawback period is four and a half years provided at the time of the transfer, there are no known claims and it’s not for a purpose of defeating creditors. So, that means, anything that we do whether it’s transferring the family home from a high-risk spouse to a low-risk spouse, implementing the gift and loan back, restructuring a business, can be unwound by the trustee in bankruptcy within four and a half years. So, any claim by a creditor that has a successful judgment against you within that four and a half years can clawback those assets that we transferred away and those assets can be available to satisfy the claim. Now, there’s different periods in play if you actually have a claim on foot, so the purpose of the transaction is to defeat creditors, then that period becomes unlimited. So, the clawback is indefinite. So, what are the main principles that we need to take out of these rules? Firstly, implement your asset protection transfers as soon as possible before there is a claim because once there is an issue on foot, we really can’t do anything. It’s not worth doing it if it’s going to be clawed back. Secondly, get your four and a half years over as soon as possible. So, a lot of people kind to sit there going umming and ahhing should I do it, shouldn’t I? They might let a year or two go past and then they decide to do it and in that time, your clawback has basically gone from four to six. If you had done it when we first talked about it, then you would be halfway through it already. So, do it early, do it often. I don’t have any strategy or loopholes to avoid the clawback, it is just a fact of life. There are some things that you can be a bit strategic about in terms of asset protection and managing the clawback, so we can do things that we at least quarantine the amount that is claw backed, sorry, clawed back to the value at the time. So, if I’m going to transfer a business or an asset into a company or a trust, I can do two things. I can just transfer it for nominal value, for a dollar, because I’m transferring for myself to a related entity. If that is clawed back, they clawback the business assets and if they’ve increased in value over that four year period, then the increase in value is available to satisfy the debt. Another approach is that I actually transfer the asset of the business for full market value under a vendor finance loan arrangement and then the debt gets forgiven. So, the amount that gets clawed back is actually the forgiven debt which is the value of the asset of the business at the time of the transfer, so the increase in value over time is not what is clawed back, it’s actually the forgiveness that is clawed back. So at least, you can quarantine it to the value at the time and protect the increase in value, so the clawback is something that we really do need to bear in mind when evaluating an asset protection strategy. My sense is it’s still worth restructuring assets for asset protection even if it is subject to the clawback for a couple of reasons. One, that four and a half year period might go by pretty quickly, it seems like it won’t but there’s a lot of clients where they have exceeded the clawback period now and they’ve done the right thing by putting the asset protection in place and now they have that peace of mind and protection. Secondly, what we’re trying to do is put as many hurdles in front of someone who’s trying to access your assets as possible, so yes, they have to go through when they can go through the clawback but it might just be enough of a deterrent for them not to bother to having to do the clawback. So, those are my thoughts on the clawback. If you’ve got any comments or questions or insights that you’ve seen, please feel free to share it, I’d love to hear about it. But I want to just set that out because it applies to all of us and my main message is if you transfer assets while there is no known risks and no clear purpose to defeat creditors, then the clawback is only four and a half years. If there is a claim on foot, it’s unlimited. So, get it done now before there is any issues. We cannot rearrange the deck chairs once a claim is on foot. Thanks so much for watching.