An asset protection plan is a proactive series of strategies designed to legally restructure and protect your assets from creditors and/or civil judgments. These strategies can be utilized by individuals or by businesses to protect assets, avoid lawsuits, privatize their financial matters, and/or provide settlement negotiation power. 

Who is Asset Protection Planning For? 

Asset protection planning is not just for the super wealthy, but for anyone who has accumulated assets throughout their life such as savings, stocks, or personal property. Unfortunately, no one is immune to the possibility of a lawsuit. Certain professions such as business owners, accountants, and real estate agents are at greater risk of lawsuits due to the nature of their work. However, even a simple trip to the grocery store can lead to a fender bender and end in a lawsuit. 

When Should I Start? 

As is the case with most estate and financial planning, it is important to start the asset protection planning process before you need it. An experienced asset protection attorney can help reposition your assets to be out of reach by creditors. Unfortunately, if you wait until after a lawsuit has been filed to start this process, the state will see this as a deliberate, fraudulent restructuring of assets. Once a claim is made against you, it is likely too late to enact any significant protection strategies. 

What Assets Are Exempt From Creditors?

Thankfully, not all assets are subject to creditor claims. If you own your home, Florida has a homestead exemption that protects your home and certain acreage from creditors. If you don’t utilize the homestead exemption, you can claim a personal property exemption of up to $4,000. Separately, you can claim an exemption of up to $1,000 of the value of your vehicle. 

Married debtors are eligible for even more exemptions from creditor claims. Jointly held property by a married couple cannot be divided to satisfy a creditor, giving further protection to some of your assets. Depending on how much you make, part or all of the head of a family’s wages may be exempt from creditor collection. 

An experienced asset protection attorney can use these exemptions to your advantage when developing your asset protection plan by converting nonexempt assets into exempt assets. 

What Are Asset Protection Strategies?

Mortellaro Law’s experienced asset protection attorneys offer a number of strategies to help you keep your hard-earned wealth safe from creditors. 

  • Domestic asset protection trust – by placing assets in one of these trusts, the assets become owned by the trust rather than the grantor. These trusts can provide greater protection to your assets but may not provide protection from creditors if the grantor remains a beneficiary of the trust.
  • Offshore asset protection trust – by setting up an offshore trust, your assets could become harder to reach by creditors and in some cases, you may be able to remain a beneficiary of your own trust. 
  • Corporate and LLC asset protections – there are numerous benefits to properly establishing your business as either an LLC or a corporation. Perhaps the most important benefit is ensuring your business becomes a separate entity than you as an individual. This will help make sure the business’ assets are unaffected by your personal creditors and your personal assets are unaffected by your personal creditors. 
  • Irrevocable trust – these trusts will protect your assets from creditors and can be used to help you meet asset limits for government programs. While you choose your trustee and beneficiaries, upon the establishment of an irrevocable trust, the grantor loses all control over the assets.
  • Florida land trust – these trusts help keep the ownership of property in the trust a private matter. Furthermore, property in the trust is considered personal property rather than real property, which can help avoid liens from creditors. 

Your asset protection plan does not exist in a vacuum and should work in collaboration with your overall estate and financial planning goals. Each person’s financial situation is different, so we encourage you to call or visit us to see how we can help you protect your assets and plan for your future. Our experienced asset protection and estate planning attorneys are standing by to help you navigate this process, so give Mortellaro Law today at 813-367-1500 to arrange a free consultation.

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