How an Asset Protection Attorney Can Advise You
An asset protection attorney must figure out which assets are protected under federal and Florida law, and then must figure out the most cost effective method of protecting the rest of your assets. An asset protection analysis begins with gathering data about each of your assets: what they are; where they are; what they’re worth; what you owe on them; and how you own them (whose name is on the title).
Why should I be concerned about protecting my assets from creditors if I have none now?
You should be concerned because many sources of potential liability exist in our lives, and we cannot know when anybody will change from a potential creditor to an actual creditor. Here are a few examples, but the list is not exhaustive.
1. Slip and fall on your property – An owner of real property can be held liable for injuries that occur on the property. For instance, a landlord can be held liable for injuries to a tenant or guest occurring due to slipping and falling on the property or due to a construction defect.
2. A homeowner can be held liable for accidents that occur around the home; eg., injuries to workmen paid to work on your home or to a guest slipping and falling on the property;
3. A physician, lawyer, engineer, dentist, architect, and may other professionals can be held liable for negligence in the performance of his profession. Mistakes are inevitable, and sometimes a decision or action can be portrayed as negligent when a bad result occurs, even though due care and good judgment were exercised by the professional.
4. A person can be held liable for negligence as an officer or director of a company, such as lack of due care to provide proper oversight of employees;
5. A person could be held liable for damages caused by someone for whom the law deems you responsible (e.g., employees, children, subcontractor, joint-tenant and partner), even though you may believe you lack enough control to be held liable. For example, an employer is generally (vicariously) liable for the activities of employees in the scope of the business.
6. Failed marriage — disgruntled spouse – Dissolution of marriage leads to financial obligations to the ex-spouse, such as child support and alimony.
7. Liability due to serving as trustee of a trust or personal representative of a probate estate;
8. Environmental “Superfund” and other such obligations relating to pollution of real property; or
9. Contractual exposure, such as personal and business loan guaranties and promissory notes.
10. Liability arising from joint ownership of property.
11. Auto collision involving you or a family member – You could be held liable for damages caused by automobiles and boats that are owned or driven by you or a family member.
1. Certain types of property are exempt from execution by most judgment creditors. Property which is exempt from most creditors include, for example:
b) Tenancy by the entireties
c) Pension and IRA
d) Life insurance policies
f) 529 Plans
g) Disability and Social Security Benefits
2. Interests in certain business entities, such as limited partnerships and limited liability companies, cannot be foreclosed upon if they are executed upon by a judgment creditor.
3. Certain types of irrevocable trusts offer protection to beneficiaries from most judgment creditors.
4. A premarital agreement can protect your assets from your spouse.
a) Under Sec. 732.702, Florida Statutes, a person may waive all rights he otherwise would have upon the death of his spouse, including for instance the right of election and rights to homestead.
NOTE: a premarital waiver of rights to a spouse’s qualified retirement plan benefits is ineffective. Waiver can only occur after marriage.
b) Also can waive rights spouse may have upon divorce.
c) Waiver of rights under Sec. 732.702 after marriage requires full disclosure of assets, but waiver of rights under Sec. 732.702 before marriage does not require full disclosure. However, waiver of rights incidental to divorce does require full disclosure of assets.
d) It also requires that any such waiver be knowing, which also means that each party must be represented by his own legal counsel. Not doing this exposes the agreement to legal attack.
How Can You Defend Against Lawsuits?
1. Consult qualified estate planning and asset protection attorney and plan strategy
a) Use multiple techniques.
b) Complex, multi-level defense is superior
2. Take action — planning is never adequate
3. Plan and act before the problems are imminent.
4. Document your file with reasons other than protecting assets from creditors for taking action.
5. Review status periodically.