Protect Your Assets Now
What Is Asset Protection?
There are multitudes of ways in which you can lose your wealth, lawsuits, judgments, divorce, and creditors. Asset Protection refers to the use of strategies and legal tools such as LLC, privacy trusts, and asset protection trusts to safeguard one’s assets. The process starts with a consultation with an experienced professional who will review your assets, risks, and financial objectives. Once a strategy is set depending on your situation, the expert will establish legal barriers between creditors and you. Often, the strategy includes business and estate planning.
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If you have assets, then asset protection is essential. You never know when a claim against your assets may occur even if you do not have any significant debts. It’s better to safeguard your assets now before a claim arises than trying to set something up after a claim. We’ve listed some of the reasons why you would need asset protection below:
You have a high-risk profession, e.g. lawyers, doctors, real estate developers.
You have a high net worth
You are a business owner or self-employed
You own rental real estate
You have a personal guarantee
Your children or parents drive your vehicles but titles remain in your name
Asset protection trust is a legal document in which the trustee can be designated to a third party to hold items of value and keep them away from judgment creditors. The trustee acts in a fiduciary capacity for the trust beneficiaries placing their interests ahead of his own.
Domestic Asset Protection Trusts are available in 16 states: Alaska, Delaware, Rhode Island, Nevada, Utah, Oklahoma, South Dakota, Missouri, Wyoming, Tennessee, New Hampshire, Hawaii, Virginia, Ohio, Mississippi, West Virginia.
Offshore asset protection trust jurisdictions include the Isle of Man, Cayman Islands, the Cook Islands. It’s best suitable for assets that already are or can be moved offshore.
Creditors are prohibited from seizing an LLC’s money or property according to the LLC statutes. In most states, a charging order Is the creditor’s exclusive remedy. The creditor has the right to distributions paid out of the LLC but cannot force the debtor to make such payment. The states with the most protective statutes are Wyoming, Nevada, and Delaware.
The Caribbean Island of Nevis offers stronger asset protection as evident in the Nevis International Exempt Trust Ordinance of 1994 and its amendments including the short statute of limitations, the unlimited number of years for a trust, the non-recognition of foreign judgments, etc.