If you are in Florida, you should know that the state has favorable laws that aid with safeguarding your assets from creditors. An asset protection lawyer in the state would use different strategies to safeguard your assets. Without proper protection of your assets, creditors have the option to seize and sell your possessions. When you have this protection to your assets, your loved ones and family members can enjoy the assets. Before gaining some knowledge on this concept, it is better to understand what constitutes an asset?
What Constitutes an Asset and What Does Not?
The asset is a term used for denoting every valuable that you own. When talking about assets, some are income generating, while some are non-income-producing assets to you. It means that some assets face value appreciation and bring some sort of income to you, while some do not face such appreciation or generate income. The former falls under income-generating assets, while the possessions falling under the latter category do not generate any income or value appreciation to you. However, something that does not bring you appreciation or income should not be considered as an asset in Florida.
It is your responsibility to identify what constitutes an asset to you. In turn, you can understand what type of protection you can get from asset protection. A possession that generates income for you can be a business in Florida or a rental property that you own in the state. But, a non-income producing asset like an antique car or a stamp collection cannot be considered as an asset for Asset Protection. Even the investment account you own and funds that you have saved in a bank are considered assets. The reason is that these investments generate your income, and they help with improving your net worth.
What Is Asset Protection?
Now, you know what constitutes an asset and what does not. Now, you should know what asset protection is. Asset Protection Planning is an ethical and legal process that involves reviewing your financial holdings. Also, it involves restructuring your holdings so that you can get legal exemptions. When you do this, those assets can come far away from your potential creditors. At least, asset protection planning can make it hard for creditors to reach your assets. Apart from protecting your assets from the present creditors, it will also help you deal with future creditors.
Who Should Go For Asset Protection Planning?
Every person, who is fortunate enough to gather assets in the present economy needs some sort of asset protection. Many attorneys in Florida are competent enough to safeguard their clients against deep-pocket defendants. In most instances, juries or judges decide based on emotion as against facts. In turn, a person, who has worked hard to gather those assets has no other option other than facing the catastrophic damage of wiping out the lifetime of investment and hard work.
Asset Protection Strategies In Florida:
It is better to work with an attorney to understand the different options and strategies available for asset protection. However, here is a general overview of the options available in the state for safeguarding your assets:
- Offshore business entities and trusts
- Irreversible trusts at the domestic level
- Marital agreements like the post and pre-nuptial agreements
- Domestic business organizations like limited partnerships, corporations, and LLCs
- Qualified accounts and wage accounts
- Life insurance and annuities
- Personal or homestead residence protection
Of these strategies, the one at the top of the list is the most expensive and uncommon option. The last one is the affordable and common option. In this way, your attorney will suggest the right option for you after evaluating your needs completely. When the options mentioned above are protected asset classes, there are also other options with little or no protection:
- Personal property in the name of an individual
- Business owners as a partnership or sole proprietorship business.
- Real property in the name of an individual that does not include a personal residence
- Non-qualified investment accounts like trading and mutual funds
- Checking CDs and personal accounts
To handle these things with ease, it is better to work with an attorney with the best asset protection knowledge.
What Are the Issues With Asset Protection?
The crucial issue with late-stage asset protection is the probability of asset transfers or titling to be undone as fraudulent conversion or conveyances. You need not want this to happen, isn’t it? So, it would be better to plan things early.
What Type of Mistakes To Avoid In Asset Protection?
When it comes to choosing an asset protection plan, many owners make some common mistakes. Understanding the common mistakes will help you with avoiding them:
Paying a huge fee for a complicated asset protection plan:
The thing to remember here is that the best asset protection plan is a simple plan. Remember that a complicated and the most expensive plan is not always the best.
Leaving Control Over the Assets:
It might be suggested that leaving control over the assets is the only effective solution to safeguard your assets from creditors. But, in reality, this is not the right option in all cases. So, talking to your attorney concerning this would be a good idea.
Confusing Asset Protection and Bankruptcy Law:
In Florida, the bankruptcy law does not affect the homestay exemption available outside the court of bankruptcy. Do not commit the common mistake of considering bankruptcy to safeguard your assets.
Confusing Estate Planning and Asset Protection:
Of course, asset protection is a part of estate planning. However, a self-settled irrevocable or living trust does nothing to safeguard your assets from creditors. So, do not make the mistake of confusing estate planning and asset protection.
As your Estate Planning & Probate Attorney, we have the best experience in carrying out asset protection for you. We consider different factors before framing the right asset protection plan for you.