General Asset Protection Information
Asset protection is becoming an important part of middle income Americans’ lives. Small business owners are scared to death of the wacko lawsuit. There is a predator waiting around every corner to take away everything they have worked so hard to build. Lawyers generally don’t do asset protection for clients, because they get paid the big bucks to clean up the mess after some idiot attacks you. Life’s disasters, such as taxes (the IRS is a disaster), divorce, ID theft, lawsuits, major medical problems, and accidents are something we all face. It doesn’t matter which one of the disasters hits you, they are a big asset protection threat to you. A little asset protection planning today can mean a huge difference in your financial security when the disaster or attack occurs.
Most asset protection techniques are based on the concept of ownership. If you don’t own it, they can’t get it when they attack you. Asset protection planning usually breaks up assets between spouses or other family members. The trick in asset protection planning is to move ownership away from you and still have you control the assets and get the beneficial enjoyment of the assets.
Pretty much every home on my block is occupied by a doctor or other type of professional. A quick search of the county records will show that various trusts or people unknown to me "own" the houses my neighbors live in. They simply don’t "own" the house they live in. The businessmen and professionals usually structure their asset protection plan so that their spouse either directly or indirectly "owns " the house. If the asset protection plan is set up so the non-professional spouse owns the house, then when the professional is sued, the attacker probably can’t get the house. Make sure that you use a living trust to "own" the house rather than putting it directly in your spouse’s name, so that you don’t go through probate if he or she unexpectedly dies.There are a limited number of asset protection tools that an attorney has available to "move" ownership of assets. Living trusts can be used to hold assets, but you should note that they don’t give you good asset protection. The trust is not protecting the property. You can get good asset protection using a corporation. A corporation is usually thought of as a business structuring tool, but the corporation can be used to get some good asset protection in a family setting.
Corporations are mostly used as business tools, but they can be used to give a family some good asset protection and tax protection. Limited partnerships are another good asset protection tool that can be use in a business structure or a family’s asset protection structure. If a limited partnership is used in a family’s asset protection structure, it is called a Family Limited Partnership (FLP). A limited liability company or "LLC" is the most flexible asset protection legal tool we have today.
Whatever asset protection plan structure you create, the living trust will be at the center of the plan, because the entities (corporation, FLP, LLC, etc.) will be owned by the living trust in order to get estate tax advantages, avoid probate, and distribute the assets after a family member’s death.
When you get the new book, Guaranteed Millionaire, you’ll learn in plain English how to set up a living trust and use it as the core of your asset protection plan. Ask for the FREE 90 minute asset protection DVD, Using the Law to Make Money and Protect Your Assets. The DVD is normally $19.99. It is a great overview of the asset protection tools available to you.