Asset Protection
Asset protection planning is a very important but misunderstood and underutilized concept.
ASsET PROTECTION
Cell phones
Cell phones have become the biggest new issue when it comes to asset protection.
Classic “asset protection” is the concept of protecting your personal assets from lawsuits. Lawsuits that are most typical are “negligence” suits. What can cause negligence lawsuits?
Property ownership
If you own a home, vacation condo, rental property, etc., you have premises liability issues.
Professional liability
If you are a doctor, lawyer, CPA/EA/accountant, architect, etc., you have “personal liability” that can’t be shielded through the use of a corporate entity.
Protecting assets from creditors?
Make sure formalities in formation are followed (don’t just set one up yourself on the internet).
Make sure it is a multi-member entity;
Make sure it is set up in the correct state (one that limits the remedy of a creditor to a “charging order”);
The bread and butter domestic asset protection tool is a Limited Liability Company (LLC). The key to using LLCs to protect assets is to:
WHAT ASSETS SHOULD BE IN LLCs?
When using LLCs you should always separate liability assets from non-liability assets.
Brokerage Accounts
Rental
Property
Vacation Condos/Homes
IRAs
(depending on the state you are in)
Anything else of value
IRS
Your biggest guaranteed creditor every year is the IRS.
Other creditors, you should protect yourself from??
Stock Market
You are more likely to lose money in the stock market in any given year than being sued for negligence.
Long-Term Care Expenses
Over 50% of people 65 and older will incur expenses related to long-term care.