It has taken you a lifetime of hard work to accumulate those assets you currently have. Unfortunately, America is a litigious society and 90% of all lawsuits in the world originate in the United States. Given this environment, it is more important than ever to engage the services of a New York asset protection attorney to identify the legal strategies and tactics through which you can protect yourself against claims from creditors or lawsuits in the future. After all, why should your hard work ultimately enrich a third party at the expense of your loved ones?
Asset protection planning refers to the process of safeguarding your wealth against individuals who could have claims against it, including litigants and creditors. Furthermore, asset protection planning takes a holistic approach towards your estate and helps you to pass it to heirs while legally avoiding estate taxes and without probate court proceedings. The preservation as well as protection of wealth of clients should be the primary focus of any New York estate planning attorney. Knowledgeable and experienced asset protection attorneys examine all potential creditors now and in the future to give you a perspective on your overall risk and arrive at an appropriate estate planning structure. Protecting your assets and wealth from creditors who might have claims against those assets in the future is a fundamental way to begin a risk analysis of your current situation. An estate planning attorney who has experience with asset protection will review your assets and help you to prepare an estate plan that will minimize the risk that your assets will be lost to third parties in a litigation scenario. Tax planning is another important component of asset protection planning. You may not realize all of the potential risks to which your assets are currently exposed but your inability to address this planning with the help of a lawyer could expose you during life, and your beneficiaries post your death, to numerous challenges. Asset protection planning is needed for a broad range of different reasons, including that:
The only time to approach asset protection planning is well in advance of any possible risk. A maxim of asset protection planning is that once you’ve been sued it’s too late. Many people do not consider the benefits of asset protection planning until they are already being sued by a creditor. At this point, it’s going to be too late in the game to protect the assets that you have, whereas comprehensive planning done well in advance can minimize your exposure to any risks and leave you in a good place if a claim does arise.
A number of different asset protection tactics and strategies can be used to protect yourself from creditors. These include:
Structuring your assets to avoid losses from future lawsuits, benefitting from getting significant tax advantages by doing your estate planning and asset protection planning ahead of time and preparing for potential lawsuits are all worthwhile reasons why you want to consult with a knowledgeable asset protection attorney. Don’t try to rely on information you find online when approaching the important subject of asset protection planning- with changing laws and unique aspects in each state, it’s far better to schedule a meeting with a lawyer who is up to date on all the relevant information so that you can make an informed decision about your future. You have many things to consider in putting together an asset protection plan and the insight of a lawyer who cares may be a crucial component.
Certain individuals face a higher risk of being exposed to lawsuits than others. Those individuals who have accumulated a great deal of wealth and physicians, for example, maybe more likely to be sued than others. Regardless of this fact, anyone can benefit from the basic services provided by an asset protection lawyer. If you have built up a nest egg and want to have it protected from possible creditors or recognize that your profession has a higher than usual chance of being sued, using tools like domestic asset protection trust, spendthrift trust, dynasty trust and more can assist you with minimizing your exposure to potential risks. This allows you to have the peace of mind that not only are your wishes articulated in a comprehensive estate plan but your beneficiaries are also protected from the negative consequences of someone trying to attach the assets you have worked so hard to accumulate.
Asset protection is a specialized practice recognized by the American Bar Association and the purpose is effective and comprehensive legal planning. This is 100% permissible and legal.
A properly designed asset protection plan can protect the assets of partnerships, individuals, corporations and LLCs from potential litigation and creditors.
Revocable living trusts provide very little protection for your assets. They are only intended to help you avoid the probate process after you pass away.
When taking on a new case, the other attorney will look at his or her chances of recovering funds. If this is unlikely because of the presence of asset protection planning, your creditor may have trouble finding a lawyer at all. Even if your plan doesn’t block a suit entirely, its very existence could also lead to a low settlement.
In some cases, you may be under the impression that you can avoid having your assets exposed to the risk of litigation by giving them to your children or your spouse, but you give up control of the assets that you gift if this does work. Furthermore, you will lose the income derived through those assets and can incur gift taxes if you give them to anyone except for your spouse. Furthermore, if a creditor is already lurking and you make a gift, a court could decide to undo the gift which means that asset is not protected at all.
Certain assets cannot be held inside an LLC. You would lose the opportunity to deduct home interest mortgage costs if your primary residence is owned by the LLC. However, this is not true with a properly structured asset protection planning trust. In addition, an LLC on its own can only offer limited protection and a jury can pierce this and destroy the protections of the LLC, if you own it personally.