Asset Protection Planning

Securing Your Wealth from Liability Losses and Taxation

Prudent estate planning includes numerous strategies to protect the wealth you have acquired from losses due to liability and excessive taxation. Successful individuals are frequently the target of specious lawsuits from plaintiffs looking for deep pockets. They are also subject to high levels of taxation at the state, federal and local level. We help our clients take advantage of legal strategies that protect wealth from unnecessary loss. Many of those strategies involve the creation of trusts to hold assets and pass them on to heirs. Trusts are flexible instruments which we can tailor to meet your goals for asset protection and succession.

The Benefits of Trusts for Asset Protection and Succession

Trusts are legal entities you create that can own your assets during your lifetime. After your passing, the trust can continue to hold the assets or disburse them to your beneficiaries. A trust can offer protection from lawsuits, creditors and taxes for both you and your beneficiaries. Effective trust instruments include:

  •  Asset Protection Trust — Irrevocable trusts specifically designed to shelter real estate or other assets from creditors. These entities make it difficult, if not impossible, for creditors to seize assets, compelling a creditor to settle on favorable terms rather than resorting to expensive litigation.
  • Trusts Designed to Protect Public Benefits — Irrevocable trusts, such as income-only trusts, Medicaid trusts and supplemental needs trusts shelter your home and other assets, and provide funds for disabled persons who can then qualify for Medicaid, Social Security, and other public benefits.
  • Qualified Terminal Interest Property Trust (QTIP) — A very useful trust for people of means in a second marriage, the QTIP protects the inheritance of the grantor’s children from a first marriage, who might be excluded from inheritance if assets, such as a home, were passed with no restrictions to a second spouse. A grantor can also use a QTIP to maximize estate tax savings.
  • Life Insurance Trust — Owning a life insurance policy and naming your heirs as beneficiaries is not always the best way to pass life insurance benefits. An irrevocable life insurance trust is another way to reduce or eliminate estate taxes by taking the proceeds from a life insurance policy out of the decedent’s estate, thus avoiding estate taxes.

Identifying Other Strategies to Protect Your Assets

We also help our clients expand their asset protection by reviewing existing insurance policies and recommending ways to reduce exposure to liability. For self-employed individuals or small business owners, we provide pertinent advice on the advantages of incorporation or forming a limited liability company for securing assets from claimants and creditors.