Asset Protection
Ownership and Control. These are the issues protection addresses. The law provides you with legal ways to reduce your vulnerability to loss of your family’s lifestyle and wealth to creditors and predators while still letting you maintain control. Asset protection planning strategies, properly implemented, can serve as your wealth protection plan to preserve your personal and business assets, thereby protecting your family from financial loss. Asset Protection is for anyone concerned about the loss of their wealth and family lifestyle due to litigation or the ethically challenged. If you are a business owner or medical professional, you are more vulnerable to loss than most.
Asset Protection. What it is not.
Asset protection is not about lying, hiding assets, or engaging in criminal activity to hinder, delay or defraud creditors. The law provides ways for you to protect your assets, but the key is that in order to take full advantage of the law, you must have those protections in place prior to a crisis.
Asset Protection. What it is.
Asset protection involves protecting your hard earned wealth from loss to creditors, predators, bankruptcies, and divorce using legal strategies. You can use legal structures to achieve an advantage for you. By planning ahead, you can ensure a high degree of certainty of outcome. Asset protection planning allows you to maintain control of your assets by structuring affairs to discourage lawsuits from the outset and avoid liability traps related to how property is owned (i.e., general partnerships or other joint ownership arrangements). Look at a number a of different risk areas. It is best to plan before a claim arises.
Levels of Planning
Level 1: State and federal exemptions
Level 2: Transmutation agreements. Changing community property to separate property and putting assets in the hands of a low risk spouse
Level 3: Forming limited liability companies (PA, PC, PLLC)
Level 4: Forming leasing LLCs to own or lease property, equipment, or accounts receivable
Level 5: Creation of FLP/FLLC to own non professional assets
Level 6: Domestic Asset Protection Trusts
Level 7: Offshore Asset Protection Trusts
Texas law itself provides a substantial amount of protection for certain assets. In most cases, these include your homestead, a specific amount of personal property, retirement accounts, 529 college savings accounts, life insurance and annuities. In our Asset Protection Program, we counsel our asset protection clients on ways to maximize the benefit of these “exempt” items.
Other, “non-exempt” assets, can enjoy a large measure of protection by the use of legal structures such as family limited partnerships, limited liability companies and on-shore as well as off-shore irrevocable trusts (revocable living trusts, which are discussed under the Estate Planning portion of this section, are not asset protection trusts). Keeping your estate from being decimated by a lawsuit is a top priority for many clients. The law strongly discourages asset protection planning AFTER you become aware of a potential claim against you. It is imperative to begin your planning now, well in advance of any problem that could arise in the future. While no particular technique is “bullet-proof”, with proper planning, a very large degree of protection and peace of mind can be achieved.
Getting Started:
We have a 3 step approach to asset protection planning.
Discovery:
During this initial meeting we determine if the relationship is a mutual fit. If so, we will gather necessary data to begin formulating a protection strategy.
Strategy Meeting:
We meet with your advisors to come up with a consensus solution.
Solution Meeting:
We meet to present the unified solution to your planning needs.
