California Estate Planning Attorney Details Why Asset Protection Is Critical in Trying Economic Times

9:10 pm Asset Protection, California Trusts, Domestic Asset Protection, Estate Planning, Foreign Asset Protection, Offshore Trusts

asset protection 2 e1327093749885 California Estate Planning Attorney Details Why Asset Protection Is Critical in Trying Economic TimesThe golden rule of asset protection is: plan ahead.  Once the proverbial asset horse has left the barn, there is no point – or legal way – to close the barn doors.  Once a divorce is filed, a creditor begins pursuit or bankruptcy looms, there is no way to protect your assets unless you have planned ahead.

A post this week at NuwireInvestor.com details a number of asset protection techniques that can protect you if you implement them before trouble strikes:

Exemption planning – the law allows you to keep certain assets, called exemptions, in situations of credit default, bankruptcy and even divorce.  Converting nonexempt assets into exempt assets can be done, but it must be done in advance.

Life insurance – the wealthy can use life insurance to protect assets from estate taxes, and the less wealthy need it if they have dependents to protect.

Liability insurance – liability insurance will pay creditors in the event of a lawsuit, and will also cover the majority of your legal expenses.

Qualified retirement plans – IRAs and 401(k)s provide an extra layer of asset protection as well as a tax deduction for contributions.

Spousal gifting trust – if you’re married, you and your spouse can create a Spousal Gifting Trust to protect assets against estate taxes and creditors, while retaining the control and use of those assets.

Family LLCs and FLPs – Family Limited Liability Corporations or Family Limited Partnerships can be used to shield assets from creditors.

DAPTs – if you are a California resident and set up an irrevocable trust naming yourself as beneficiary, you are not protected against creditors.  However, A California estate planning attorney can help you set up a Domestic Asset Protection Trust in a number of other states that will allow you to establish an irrevocable trust, name yourself as beneficiary, and protect your assets from creditors.

Offshore Asset Protection Trusts – one of the best vehicles for protecting assets against lawsuits or creditors is the Offshore Asset Protection Trust.  This is a trust established in one of a number of foreign countries that have laws in place prohibiting creditors from taking your trust assets, no matter what – while still allowing you to access your assets.

Contact us today for individualized planning strategies to meet your unique needs.

 

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