Asset Protection Strategies
Estate planning is not only about detailing your wishes after you’re gone. It also means protecting your assets for as long as possible, so you can enjoy the fruits of your labor.
Understand the Attorney’s Role
Before diving into asset protection strategies, it’s crucial to understand the scope of assistance you’ll receive from an estate attorney. We can provide you with legal strategies to protect assets. Financial advisors could guide you about asset protection. They can advise about choosing CDs, stocks, or bonds, or how to “time the market.” Talk to your attorney about referrals. Trusted financial planners work in tandem with legal teams to help grow your protected assets.
Smart Asset Protection Strategies
Experienced estate lawyers who specialize in asset protection can construct legal entities and strategies that shield your money from others and allow you to pass on more funds to heirs.
- Protect yourself from legal action. If you inherit a home and want to rent it out, consider creating a business such as an LLC to manage all of the finances related to the rental property. This strategy will shield your personal funds from potential lawsuits brought displeased tenants. Your tax accountant will also likely appreciate a separation between your rental income and personal funds.
- Shield personal assets from creditors. An experienced legal team can help advise clients about ways to reduce their client’s exposure to creditors by creating trusts, estate plans, foundations, and other entities. This protection keeps creditors from litigating against a person’s individual wealth because the bulk of their assets are not technically their own. This strategy can also legally shield money from estate taxes.
- Increase your insurance. If you have built a sizable nest egg or recently received an inheritance, you likely need more umbrella liability coverage. This provides coverage for a host of incidents, such as a roofer falling, a maid slipping on granite floors, or a person claiming food poisoning after eating at your bakery. Talk to your insurance broker about increasing your coverage to match your net worth.
Asset Protection Tactics for Healthcare Professionals
Dentists and doctors require specific asset protection advice because their work puts them at considerable risk for malpractice lawsuits. This is especially true for professionals who run their own practice, as they don’t have the protections offered by a larger hospital or clinic. Proactive planning is crucial, as you cannot create an asset protection strategy after an incident occurs, or even when you think a lawsuit is imminent. This tactic would be known as a “fraudulent conveyance” and would likely be denied in court.
Here are some advanced strategies for asset protection:
- Ensure you have adequate amounts of professional malpractice liability insurance with limits that would likely cover any likely settlement.
- Consider a qualified personal residence trust (QPRT) where you give your home to the trust even while continuing to reside in it.
- Create a family limited partnership (FLP) where you take a small percentage interest in assets along with the rights of management. Creditors will need to go through several hoops to reach assets structured in this manner.
Advanced asset protection strategies are complex. They require the experienced hand of a legal team that understands the latest state and federal laws. Trusts require you to relinquish some control over assets in order to prevent massive losses from lawsuits or creditors. 
About Skvarna Law
Skvarna Law Firm operates offices in Glendora and Upland, California. We provide legal services for individuals living in San Bernardino, Los Angeles, Orange and Riverside Counties. This includes the cities of Upland, Ontario, Montclair, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Pomona, La Verne, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
