Asset Protection Planning

Protect Your Assets

When planning for the future, it’s important to consider not only who will inherit your assets, but also who will be looking to take them away.

While a living trust is a great tool to avoid probate and protect your heirs from unnecessary taxes, it does not protect you from potential creditors.

If you want asset protection for yourself, additional planning is required.

There are various levels of asset protection – from a single-member LLC to protect against the potential liabilities of a rental property to offshore trusts designed to protect your liquid assets like cash and investment accounts from future aggressive creditors.

We Can Help You:

Identify your personal “risk tolerance” level – which risks you are willing to live with and which risks you aren’t
Decide on an asset protection plan you are comfortable with by balancing what we refer to as the “3 C’s”: Cost – Complexity – Control
Implement the legal structure that will provide the level of protection you want for a fixed fee that you’re comfortable with

Weigh the Pros and Cons

The Benefits Of Asset Protection

Your real estate, financial accounts, and business interests are often your most valuable possessions. If you own these assets personally or in a revocable living trust, they are vulnerable to your creditors.

If you legally transfer these assets to a properly structured LLC, partnership, irrevocable trust, or offshore trust, you can shield them from attack.

You want to also make sure your structure allows you to retain the use, control, and access to your property. As John D. Rockefeller used to say, “Own nothing, control everything.”

Other benefits include:

Enhanced income and estate tax minimization opportunities
Integration with your overall estate plan
Mentoring opportunities by involving your children/heirs
Dynasty planning – perpetuate your structure over generations

The Potential Drawbacks

Do not try this at home. A “do it yourself” approach to asset protection can have serious negative tax consequences and get you in trouble with the courts.

Professional guidance from an asset protection attorney can help prevent:

A false sense of security – thinking you have protection that you don’t actually have
Fraudulent transfers – transferring property after the fact to delay, hinder or defraud a creditor can get you into trouble with the judge
Loss of control – unintentionally transferring assets in a way that causes you to give up management and use of the asset
Unfavorable tax consequences

Hiring an experienced attorney who knows how to navigate the minefield of advanced legal planning is crucial. We’ve seen our clients’ asset protection plans hold up in pre-litigation, litigation, and bankruptcy proceedings.

The Setup Process

The first step is to work with you to design an asset protection plan that accomplishes your objectives while balancing your tolerance for cost and complexity. We create a custom-written diagram for you so you and your other professional advisors can easily keep track of all the moving pieces.

Our firm takes care of all the paperwork in consultation with you, freeing up your time to take care of other areas of your business.

The Next Steps Are To:

Consult with your other professional advisors and get them on board with the new plan
Prepare state filings
Integrate new entities within existing estate plan
Draft internal documents such as trust agreements, operating agreements and partnership agreements that explain how your entities will be run
Prepare tax filings
Transfer your real estate, financial accounts and business holdings to their proper entity

How Will This Work With Your Estate Plan?

Many of the same tools that are used to avoid probate, minimize taxes, and transfer your property to your heirs in a private, orderly, tax-efficient setting are the same tools used in an asset protection plan.

It’s how these pieces are integrated with each other that provides much of the protection.

Your asset protection plan will be fully integrated with your existing estate plan to make sure your property is not only protected while you are alive, but also after death.

This is Your Next Step

Asset protection requires extra planning