Footballer Achraf Hakimi has been in the news recently because he managed to protect his assets during a divorce by putting them in his mother's name. People have been applauding his cunning in protecting his wealth across social media, but I don’t agree. I don’t think it was a clever plan at all. I have seen many wealthy young people do this sort of thing, and it often doesn’t end up going that well.
In the video (above) I explain exactly why Hakimi’s plan was a bad one. Please watch the full video until the end, as it contains important information that could help you protect your own wealth. In this article, I will cover the three main reasons Achraf’s actions weren’t the smartest choice.
1. Family risk
The first thing to consider is that Achraf simply transferred the risk from his wife to his family. If something happens to his mother, like a divorce or remarriage, the money is just as open to be divided up by the courts. This move could easily backfire and put his mother's financial situation at risk too.
It is also worth remembering that unless there is a specific will, the money will be distributed between his siblings when his mother passes away. Worse still, if he falls out with his family or makes life choices they don’t like, he could potentially never see that money again. Rather than it being a way to avoid risk, it is actually just moving the risk on to another party.
2. Inheritance tax
But suppose everything goes to plan. His mother doesn’t get divorced or remarried; there is a clear and unchallengeable will drawn up; and he never falls out with his family, he will still have to deal with inheritance tax of up to 40%! This means while he avoids the risk of paying out half his money to his ex-wife, he has the certainty of giving a lot of it to the government.
If he wanted to protect his money, a strong prenuptial agreement or establishing protective financial structures, such as protective trusts, would have been a better move. This, at least, wouldn’t mean giving 40% of his money to the government!
3. Choose your wife carefully
Ultimately, however, the best way to protect his money would be to carefully choose a partner. While I don’t blame anyone for divorce, there are ways to help minimise that risk at the dating stage of a relationship. If you can avoid meeting someone that is after your money, you can build a relationship that is based on trust and respect.
When I met my wife, I didn’t tell her about my wealth. When I did speak to her about the subject of money, I first told her about my million pounds of debt (i.e. the mortgages on the properties I owned, etc.). She wasn’t put off and even offered to get more work to help. It was only then that I revealed it was good debt and producing a lot of cash-flow. If you choose the right person, the risk of divorce is minimised substantially.