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Practice Areas

Asset Protection

Clients seek our advice and assistance to protect their assets from:

Sometimes clients contact us after there is already a problem.  Creditors are knocking at the door.  Spouses have already started a divorce.  Predators have already taken them for a ride.  The options are more limited than if advance planning had been done.  We help our clients identify their options, implement a solution and litigate if necessary.  Nonetheless, the most effective asset protection comes from advance planning.

For businesses, there are two types of creditors for which planning is done.  The first are creditors of the business itself. Business owners often want to have their personal assets protected from them.  If the business cannot pay its creditors, the business owner does not want to be liable. The planning consists of choosing the right form for doing business in the first place. The business must be formed as a limited liability entity - a corporation, a limited liability company (LLC) or a  limited liability partnership (LLP).  Sometimes, it is more complicated and the state of incorporation will make a difference.  In that case, we may recommend the use of a Delaware corporation. 

The personal creditors of a business owner can also be a problem.  Asset protection planning frequently deals with potential problems that these creditors have on the management of a business.   This is particularly critical when dealing with LLPs and LLCs.   Accordingly, we may recommend the use of Wyoming, Delaware, Nevada, South Dakota or Alaskan LLCs.

Adequate insurance is critical to asset protection planning.  We help our clients and their businesses identify the nature and amount of insurance they needed.  We regularly recommend that our clients get the largest umbrella policy possible.  The additional cost is small, especially in comparison to the liability protection afforded.  Their businesses can get affordable umbrella coverage too.  We make sure that they see competent insurance professionals if they do not already have a trusted relationship. 

Beyond this, there are a number of more complicated approaches ranging from rabbi trusts to offshore trust planning.  The cost climbs as the planning gets more sophisticated.

In the divorce context, asset planning starts with a prenuptial agreement.  We help our clients negotiate and prepare these agreements.  We assist them in setting up proper accounts and procedures to administer it.  We meet annually with them to make sure that changing circumstances do not limit its effectiveness.  If there are changed circumstances, additional action may be needed including amending the agreement.

Estate Planning is also part of an effective asset protection plan.  We discuss with our clients the asset protection opportunities at every level of their estate plan.  At its most basic, we discuss how they can protect themselves, their spouse, children and descendants against creditors, divorce and predators during incapacity or at death by properly created trusts.  We discuss the use of irrevocable trusts including qualified terminal interest marital trusts, family or credit shelter trusts, incentive trusts, special needs trusts, life insurance trusts, dynasty or heritage trusts, IRA trusts, and retirement plan trusts.