What is Asset Protection?
An asset protection attorney can help you own and structure your assets in a way that discourages stupid lawsuits and mitigates potential losses from lawsuits. This area of law is greatly misunderstood by both non-Asset Protection attorneys and consumers. This type of planning is not meant to be a 100% guaranteed way to keep your assets safe. There are too many variables between state laws and activist judges that keep any asset protection strategy from providing a guaranteed solution. The goal of asset protection planning is to provide obstacles to predators (creditors, plaintiff’s lawyers, etc.) who may want to come after you. If your assets will be difficult or impossible to get at, then there is no financial incentive for a contingency lawyer to come after you.
What types of asset protection are available?
Asset protection planning comes in all different shapes and sizes. Attorneys who practice in this area often refer to the different levels of planning in comparison to a pyramid, ladder, or staircase. Meaning that you start at the lowest level and then move on up the ladder. As you get higher, the level of protection increases, as well as an increase in the financial costs or investments. For example at the bottom you have basic estate planning and insurance planning. Then you may move up to marital exemption planning and business entity planning like LLCs, or Anonymous LLCs. From there you can get into asset protection LLCs in Wyoming or Nevada and Domestic Asset Protection Trusts. At the top of the pyramid or ladder is often Offshore Planning structures like Nevis LLCs and Offshore Asset Protection Trusts.
Why Asset Protection?
The United States is the most litigious society in the world. Expanding theories of liability have translated to a general belief in society that somebody must pay for every wrong, even if the person who must pay had no direct cause for the wrong. The US court system is available for anybody to file suit against anyone. You don’t even need to have a strong case; you just have to pay a small filing fee to get the ball rolling. Just hobble together something that appears like a legal claim and see if you can win an easy settlement. This is what many plaintiff’s lawyers do, because there is no downside. It’s easy to file a case and there is rarely any punishment for filing frivolous lawsuits. Unfortunately, the victims of these frivolous lawsuits rack up tens of thousands of dollars in legal fees answering to these stupid lawsuits.
You may be a target of these frivolous lawsuits if you appear to have assets that can be taken, or if you are a successful professional with high earnings like somebody in the medical field. You can reduce the chances of being a lawsuit target by doing some planning before you get into legal trouble. This type of planning generally involves 1) making yourself look poor (i.e. increasing privacy by removing your name from public databases, and; 2) moving your assets into protective structures like trusts and LLCs.
Who should hire an asset protection attorney?
Asset protection planning is not just for the wealthy. Anybody who is at risk of being sued or who wants to make sure their assets are safe from all the uncertainties in life. This may include doctors, dentists, chiropractors, CPAs, financial planners, business owners, and owners of rental properties.
Want to find out more about how an asset protection attorney may be of value to you? Schedule an initial call with LayRoots to learn more.
Asset Protection Attorney Articles:
Asset Protection for Physicians
Does a Living Trust Protect Assets
Levels of Asset Protection Planning
Balancing Washington and Federal Estate Taxes
Real Estate Investing and Asset Protection
How to Protect Your Home Equity
Is Your Single-Member LLC Safe From Creditors?
How to Protect Your Investment Property
Asset Protection Strategies: Stupid Lawsuits
Asset Protection Strategies: Life Insurance Creditor Protection
Asset Protection Strategies: Protecting Rental Property
Asset Protection Strategies: Inherited IRA
Asset Protection Attorney Definitions:
Spousal Lifetime Access Trust
Hot vs. Cool Assets
Domestic Asset Protection Trust
Offshore Asset Protection Trust
Inside vs. Outside Liability