Asset protection planning involves the application of many different areas of law. The development of a comprehensive asset protection plan may involve family law, tax law, trust laws, business planning laws, state and federal bankruptcy laws, and on and on. The areas of law intersect in different ways depending on each individual’s situation and planning goals. In addition, to develop an effective plan to protect your wealth and assets from lawsuits, divorces, and creditors, you’ll benefit from working with an attorney who is versed in the practice of asset protection.
Levels of Asset Protection Planning
There are many different levels, or tiers, of asset protection planning from the basics of good insurance coverage and working up to offshore trust planning and more. What level of asset protection you need will depend on a number of factors. These factors include your overall goals, the assets you own, your risk tolerance, and your profession to name a few.
Here are a number of common levels of asset protection planning. As you move up through the tiers of planning, you can expect both the level of protection and the financial investment to increase.
Level I – Insurance planning. This may include home, car, professional liability and also umbrella liability coverage.
Level II – State and Federal Exemption Planning. States and the federal government protect certain assets from creditors. For example, the federal government protects certain types of retirement accounts from lawsuits and creditors. In contrast, Washington state law protects all types of retirement accounts.
Level IV – Protective Entities such as LLCs. Business and investment assets are better protected from lawsuits and creditors when owned within a limited liability entity, rather than in your personal name.
Level VI – Offshore Asset Protection Trusts, Foreign LLCs. The highest levels of asset protection involve removing your assets from the jurisdiction of U.S. courts.
Which level is right for you? Give us a call at (206) 219-9559 or schedule an appointment below to start exploring your options.
Colin Ley is a Seattle asset protection attorney. He is also the co-founder of LayRoots along with his wife, Shreya.