Picture this: You fall behind on your debt payments because of something out of your control. A creditor then sues you and receives the money you owe through your assets. This leaves you without a home, car, etc.
This is not a good picture. Luckily, with asset protection, you don’t have to worry about this possibility becoming a reality. You can protect your assets on your own but the process is daunting and confusing.
Your best bet is to hire an asset protection attorney who has your best interest in mind. Read on to find out more about asset protection.
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You can expect to make the most out of asset protection when you hire a lawyer and stay within the law. These attorneys may also be referred to as trust lawyers and estate lawyers.
You should hire an asset protection attorney because they will have all of the knowledge necessary to safeguard your assets and properties. The laws they understand include wills, probate, property rights, trusts, and taxes.
Asset protection is more complicated than one may think. You may have an idea of the laws surrounding it but not understand fully.
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Keep in mind that not every lawyer will understand these laws that well. That’s why it is essential to hire an asset protection lawyer specifically.
If you want asset protection, you need to hire an attorney who is ready to create a plan. A plan will help you ensure properties and assets are safe without the added hassle.
A lawyer can create a plan based on your short and long-term goals. If you have any issues or concerns, they can assist you with this process as well.
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Aside from knowing the laws and regulations in your state, an asset protection lawyer knows working strategies as well. Before getting into the strategies, they will consider your financial situation because it may affect the status of your assets.
After going over your finances, they will review which properties can be protected, transferred, and subjected to a lawsuit. Always be honest about litigation that could come about in the future.
A lawyer may recommend that you make a limited liability company (LLC) if you are a business owner. This can shield personal assets from expensive lawsuits or creditors that may take advantage of your business.
Why Would I Need An Asset Protection Lawyer?
An LLC comes with limitations as it creates a separate identity for the business and its owners. You will still be liable for any debts that may occur from your company including bankruptcy.
However, these debts won’t affect your personal account or family home. If someone files a claim against your business, personal assets will also be protected.
An asset protection attorney may recommend using liability insurance as the first line of defense. This type of insurance will protect the buyer from lawsuit liabilities.
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If you don’t have this already, an asset protection lawyer will recommend it. Liability insurance can be used for homes and businesses.
Maximizing your contributions to retirement accounts, pension plans, etc., is a smart move to shield your assets from potential lawsuits and creditors. Money deposited within these accounts is not subjected to lawsuits or court judgments under federal ERISA laws.
Without legal contracts and procedures, you’ll risk losing your assets to creditors. A licensed professional can draft these agreements for you and ensure you are following procedures correctly to keep assets safe.
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Even though there are ways to protect your assets after being sued, you’ll get through the process much easier by hiring an asset protection attorney beforehand.
As we’ve noted, asset protection law is complicated. It is hard to block creditors from gaining your assets during a lawsuit. You must hire an attorney before any problems arise to achieve asset protection.
Whether you need an asset protection plan for yourself or a business, an attorney should base their work on your needs. The plan a lawyer creates and the strategies they implement should vary depending on your situation.
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No matter what your current status is, you can benefit from hiring an asset protection attorney. That’s right, anyone can protect their assets or properties when they want to. You can protect your home, car, savings account, etc.
You should always stay ahead of the game when protecting your assets. If you start now, you can avoid problems if you ever run into a lawsuit or needy creditor.
Don’t think about asset protection when it’s too late. Contact us today to learn how our asset protection attorneys can help you personally.At Mosaic Financial Associates, the key axioms of our practice include growing, protecting and ultimately, distributing wealth. These tenets simply are not attainable without a strong focus on taxation and litigation. As such, we asked Ike Devji, J.D., who specializes in Asset Protection Planning, what critical questions someone should ask when evaluating Asset Protection attorneys. Ike helps protect a client base which includes several thousand doctors and is a regular contributor to publications such as “Physician’s Practice”. He outlines his recommendations below.
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Remember that “promoters” or LLC Mills do not possess the skill set and training required. More importantly, if you are not dealing with a law firm that allows all your communications to be attorney privileged, everything you do is discoverable with a simple subpoena, including all emails and other communications.
An East Coast law firm has nearly plagiarized the website of my associates. On it, they claim to serve thousands of clients and be a top asset protection law firm. Closer examination of the site reveals that they have a dozen plus distinct practice areas and are simply representing that client base as if all of it is with Asset Protection clients.
It’s important to deal with a lawyer and firm that have in-depth experience with businesses, assets, and families like yours. Ignoring your liquidity needs are and using outdated estate planning tools that are not income, business and age appropriate (like using a QPRT for a 33 year old) are common amateur mistakes we see other lawyers make.
Asset Protection Lawyer
Also, be aware that a number of different specialties now classify themselves as “Asset Protection” planners. This designation was formerly used only for the kind of pro-active, defensive legal planning we are focusing on in this article. The field now includes Elder Care lawyers, annuity and insurance salesman and variety of other folks that may have good products and services, but are probably not true asset protection lawyers.
By asking the average net worth of their existing clients, you may be able to discern if they are familiar and equipped to handle the needs of a high net worth business owner, physician, or high visibility individuals like a professional athlete or entertainer.
Having a law firm that works nationally is a good hedge. It’s important that they understand the protection available by statute in your locality and give you a plan that will stand up to attacks in any jurisdiction. It’s also important that the plan is portable so it can travel with you if you move and flexible enough to allow you to do business and own assets in more than one jurisdiction (i.e. something as simple as a vacation home in another state or a life insurance policy with a high cash value that could be lost in a lawsuit).
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See my more detailed explanation of this concern at the opening of this article. Make sure you are comfortable with their experience level. Lawyers are increasingly specialized and while many of them have a good general knowledge of a variety of concepts and issues we tend, like all professionals, to be good at only one or two on a good day.
This is obviously a doctor-specific question, but an important one if you are a physician or the advisor of a physician doing due diligence on their behalf. In my experience with a client base that includes thousands of doctors, we have learned that medical professionals of all types including MD, DDS, and DC have unique needs and specific technical and legal exposures that only get more onerous as their success grows. Make sure the planner or lawyer you are dealing with understands those unique issues and is trained well enough to be another set of eyes on your behalf for a holistic check-up of your wide array planning needs.
This can be tricky for lawyers, especially those who practice in sensitive fields where people value their privacy like Asset Protection as opposed to say, a real estate lawyer. Nevertheless, they should be able to provide at least a couple of professional references that speak specifically to their experience in this field or from related professionals outside their own firm that refer clients to them for this specific service.
Asset Protection Attorneys
If your planner is even marginally qualified to work in this area with you they should have extensive educational materials that describe the tools they use and what each tool does. If they can’t educate you about the tools they will likely do more harm than good, as part of our job as planners in this area is to educate our clients on what works best, why and how to use it going forward. No matter how much support a firm offers they can’t
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