WHAT IS ASSET PROTECTION?

Asset protection has become a focus of attention with individuals with growing assets and business owners as well. The reason for that is the growing number of lawsuits and demands made against those individuals having assets and businesses. Lawsuits come from many different sources. For instance, here’s just a few types of claims or suits being made against those with assets and properties:

WHY DO YOU NEED ASSET PROTECTION?        

The goal of asset protection is to keep you and your assets far away from trouble. An asset protection plan helps to shield or protect your personal and business assets from the reach of those who sue you, and from creditors. These claims can come from your actions, the actions of any one of your family members, and even the actions of your business partners.

LAWSUITS, CLAIMS, AND DEMANDS

What are just a few kinds of lawsuits, claims, and demands that can be made against you, your family, and your assets?

1. Individuals claiming money damages for injuries from involvement in a car accident with you or a member of your family.
2. Tenants suing you after getting hurt inside one of your rental properties from fire, water leaks, negligent contractor work and repairs,
3. Tenants slipping and falling outside one of your rental properties from sidewalk cracks, equipment lying around from workmen, and even dog bites.
4. Creditors making collection claims or demands for payments due from you or one of your business partners.
5. Claims made because of actions taken, or inaction by your business partners.
6. Lots of other types of lawsuits or claims that you may not have thought of before.

HOW CAN AN ASSET PROTECTION PLAN PROTECT YOU?

An effective asset protection plan restructures the ownership of your personal and business assets to safeguard them from potential future risks and losses. Most asset protection structures are commonly used business and estate planning tools; such as, limited liability companies, family limited partnerships, trusts, and other such tools. But, you should set up your asset protection plan long before the lawsuits, claims, and demands come.

Under Florida Law, and in most states across the United States, these structures MUST be set up well in advance of a suit or claim in order to be effective asset protection and estate planning measures. Otherwise, you stand the risk of your asset protection planning appearing to be an unlawful “evading creditors” scheme. If you think being sued by a creditor is a danger, don’t ever get involved with someone who tries to set you up with a “protection plan” to evade your creditors or payments you owe to the I.R.S. That’s a serious matter that WILL land you in even more trouble than a lawsuit or collections. Felony crimes can be charged against you.

Properly implemented asset protection planning should be legal and ethical. It should not be based on unlawfully hiding assets from creditors, or on illegal means of secrecy. It’s not meant to evade paying taxes. And it absolutely should not be something you try to implement at the last minute… that is, when a lawsuit has already been served on you, or when collection activity has begun. By then, it’s likely too late!

IMPORTANT: There is no one “magic bullet” in asset protection. The term “asset protection” encompasses a number of planning and structuring strategies that may be implemented to minimize a client’s exposure to the real risks of lawsuits, claims, and demands.

5 FACTORS TO CONSIDER FOR ASSET PROTECTION

When you’re considering an asset protection plan, not one size fits all. For each individual person, the asset protection strategies implemented could be very different depending on 5 basic factors:

1. the identity of the potential debtor(s), which could be you, your spouse, your children, one of your properties, or your business(es);
2. the nature of the potential claims, demands, or lawsuits that could be made against you, or any one of the above listed in (1);
3. the identity of the potential creditors or those who could sue either you, or any one of the above listed in (1);
4. the nature of your personal and business assets; and,
5. what level of anonymity you want, so it becomes difficult for anyone to discover what you own.

These are 5 basic, yet important factors that you should initially consider if you want to implement an effective asset protection plan for your assets, properties, and businesses. The analysis of these 5 basic factors will get you started in determining what asset protection planning would be possible and most effective to protect you, your family, and your business. That’s what we strive to do for you at The Mendez Law Firm, L.L.C.

AND DON’T FORGET PROTECTING YOUR FAMILY WITH ESTATE PLANNING

Any effective asset protection plan should also consider your personal and family estate planning. A Will is basic but public. A Trust, funded properly, will keep your assets out of Probate, save your family and beneficiaries thousands of dollars in Probate fees on your death, and importantly, keep you, your family, and your assets anonymous and private. But it all requires expert help, time, and energy to implement it all together with your asset protection plan.

Getting the proper help to transfer and re-title your assets into your trust is a vital step that you shouldn’t tackle without help from an experienced estate planning attorney. From Powers of Attorney, to Health Care Surrogates, to Living Wills, and more, we help you review your estate plan to ensure that the right tools are in place to protect you and your family, and to ensure that your estate plan works together with your asset protection goals.

Call The Mendez Law Firm at (407)380-7724 or email us at mail@themendezlawfirm.com. The Asset Protection and Estate Planning consultation is FREE, and there is NO obligation.