Newport Beach Estate Planning Attorney Shares Ways to Protect Assets From Creditors

7:44 pm Asset Protection, Estate Planning

estate planning image 284x250 150x150 Newport Beach Estate Planning Attorney Shares Ways to Protect Assets From CreditorsEstate planning is universally recognized as the most efficacious way to pass down wealth to your heirs, but it has another equally important role: protecting assets from creditors.

A Newport Beach estate planning attorney shares several ways you can protect assets from creditors using legally sound estate planning techniques:

Family Limited Partnership (FLP) – an FLP protects assets by limiting the ability of a limited partner’s creditor from accessing partnership assets to satisfy a debt.  Even if a creditor gets a charging order against a limited partner’s interest, the creditor would only be able to receive distributions if they are made – and a general partner could elect not to make any distributions.

Irrevocable Life Insurance Trust (ILIT) – the cash value of the policy is protected from creditors while you are still living, and the proceeds that go to beneficiaries are also protected when you die.

Inter Vivos Qualified Terminable Interest Property Trust (QTIP) – this spousal trust protects assets from creditor claims for both spouses.

Qualified Personal Residence Trust (QPRT) — allows an individual or married couple to gift up to two homes to their children and continue to live there. The purpose of a QPRT is to remove the value of a grantor’s primary or secondary residence from their taxable estate, and insulating it from creditor claims.

Contact us today and let our Newport Beach law firm help you with all your financial planning needs.

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