“The definition of Asset Protection (sometimes referred to as debtor-creditor law) is a set of legal techniques and a body of statutory and common law dealing with protecting assets of individuals and business entities from civil money judgments.
The goal of Asset Protection planning is to insulate assets from claims of creditors without perjury or tax evasion.”
Why Do I Need Asset Protection?
Any individual or business entity has potential threats to its assets, especially those who are successful with a lot to lose.
These threats do not end with just lawsuits dealing directly with your products or services are a large part of professional liability. They include such possibilities as trademark infringement and breach of contract. Your employees can also threaten your assets when something occurs in the workplace.
- sexual harassment
- employment discrimination
- work-related vehicle accidents
- workers’ compensation
- risk of incapacity
- risk of business losses
- risk of going into a nursing home
- losses due to estate tax
- risks presented by your heirs
- medical bills
- protection for assets excluded by insurance coverage
Your customers could file a claim of faulty products, malpractice, or have a “slip and fall” accident on your property.
Things like divorce, debt, medical bills and foreclosures are well-known risks to your assets in your personal life.
Other problems can come if you have not taken specific steps to plan for leadership succession should something unexpected happen to a key employee.
To protect yourself or your business from one of these liabilities, you might consider several different strategies.
- Domestic Trusts
- Offshore Trusts
- LLCs and Corporations
- Protecting Your Vehicle
Paul Ferreira is an attorney that works with each individual or company to determine which plans, trusts, and business entities will best meet their specific situations.
THE LEXWERX LAW FIRM looks beyond conventional legal practice to find the best protection for his clients.
Frequently Asked Questions
The goal of a comprehensive asset–protection plan is to prevent or significantly reduce risk by insulating your business and personal assets from the claims of creditors.
In Florida, common strategies include:
- Homestead or personal residence protection
- Annuities and life insurance
- Qualified accounts (IRAs, 401ks, and 403bs) and wage accounts
- Domestic business entities (LLCs, corporations, and limited partnerships)
- Marital agreements (pre-nuptial and post-nuptial)
- Domestic trusts (revocable (living), DAPTs, land trusts, other irrevocable trusts)
- Offshore trusts and offshore business entities
Classifications that offer little to no asset protection include:
- Checking accounts, savings accounts, and CDs
- Non-qualified investment accounts (mutual funds or trading accounts)
- Real property held in an individual’s name (not a personal residence)
- A business owned as a sole proprietorship or general partnership
- Personal property held in the individual’s name
Since the property is in an irrevocable trust, it is no longer yours.
Therefore, a creditor cannot take it from you.
In the trust document, you instruct the trustee to use the trust to provide for you and your family.
You can give members of your family limited partnership interests without any control.
If structured properly, it will be more difficult for these assets to be seized by creditor actions, and it keeps assets safer from predators.
If you have a business that you operate in your own name or as an assumed unincorporated name, your personal assets are at risk if the business gets in trouble.
If you incorporate, your business liability is limited to your business assets. Your personal assets, such as your home, are shielded.
Note: depending on the laws that apply, creditor action against a C or S-Corp may result in the creditor getting access to corporate stock and then voting to liquidate the Corporation entirely to gain access to assets.
An LLC may protect your business from this if creditors can only obtain a “charging order” and carry no right to vote.
This may limit the reach of the lawsuit.
You don’t have to give up control of your assets when using an LLC.
If spouses hold property as the separate property of one spouse, as opposed to community property, the other spouse’s creditors have more limited rights against the separate property spouse.
If you have a son or daughter who spends money wildly, gets sued often, or makes a poor choice for a spouse, you can place his or her inheritance in trust with properly drafted provisions.
The son or daughter’s creditors cannot touch the money.
Furthermore, the son or daughter cannot get to the assets or income of the trust until they are distributed at a trustee’s discretion.
Most states have statutory protections that limit a creditor’s rights to seize certain property types, even though held in the name of the debtor. The most common exemptions are:
Homestead Exemption: Generally, a dollar amount of a personal residence of the debtor is protected from creditors’ claims. Some states even protect the entire residence, without regard to value.
Wage Exemptions: States generally allow only a limited amount of compensation to be protected from a creditor’s garnishment.
Annuity exemptions: Some states exempt annuity payments from creditor claims.
Qualified plans: There is federal protection of a qualified plan’s assets from claims by the employee beneficiary’s creditors. However, this protection does not extend to federal tax claims.
IRA’s: Most states provide a degree or complete protection from creditor claims for the debtor’s IRA accounts, although there is no protection from federal tax claims.
Life Insurance Cash Value: Some jurisdictions provide considerable protection for the cash value of life insurance owned by the debtor.
With THE LEXWERX LAW FIRM, LLC, clients are billed monthly based on your selected fee plan: Hourly, Monthly Fee Plan, General Counsel for a Day Plan, or Project Specific Flat Rate Plan.
The prices listed do not include applicable taxes and expenses paid on your behalf.
However, we are committed to providing affordable and transparent legal services, so we do not charge for the following:
- Photocopying, Printing, and Scanning (* Non-normal quantities or Client requested duplicates may incur a fee)
- Travel within the Greater Tampa Bay area
- Long-distance telephone calls
Once you have assigned us a legal task, THE LEXWERX LAW FIRM, LLC will give you an estimate of the required hours for completion and continually communicate project status and any change in scope and estimated cost to allow you to understand and budget for your legal spend.
You know beforehand what your expenses will be.
We will invoice you no less than monthly on the first of each month. If we need to make adjustments in your monthly retainer, we will reach out and have a chat.
Businesses without in-house legal counsel often hesitate to seek help from traditional law firms due to their services’ high and unpredictable costs.
As a law firm with significant in-house legal counsel experience and an entrepreneurial spirit, our Outsourced General Counsel understands how timely and strategic legal advice can help you make the right business decisions.
Our “Customized to You” Monthly Fee Plans allow you to retain experienced legal counsel on a monthly budget without the cost of full-time in-house legal counsel.
It is 100% Your Choice!
- You can choose to roll-over your balance to the next month or
- We will refund the balance and review if we should adjust your next month’s bill to a lower amount.
THE LEXWERX LAW FIRM, LLC offers prospective clients a Complimentary 60-minute Initial Consultation.
We prefer to come to your business place to meet with you and get a feel for your business. Alternatively, we can meet virtually or at our offices in Tampa.
We like to get an opportunity to understand your business during this initial consultation better, explain our practical approach to legal services, and determine how we can support your company.
Just click on the “Request a Complimentary Consultation” button on this page to contact us and schedule a date and time to chat that works best for you.
This Frequently Asked Questions section contains general legal information and does not contain legal advice. The law is complex and changes often. For legal advice, please consult a lawyer.
Contact Us For Guidance On Asset Protection
Choosing the right Asset Protection Counsel can help ensure that your hard-earned assets end up in the hands that you have chosen.
THE LEXWERX LAW FIRM, LLC, of Tampa, Florida, will guide you through why we are the right choice to act as your Outsourced General Counsel. In fact, we provide custom solutions based on your specific needs and corporate dynamics. We serve the greater Tampa/St. Petersburg, Florida area.
For a Complimentary Initial Consultation, call us at 813-519-4339.
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