Publications
General Asset Protection Information
Asset protection is becoming an important part of middle income Americans’ lives. Small business owners are scared to death of the wacko lawsuit. There is a predator waiting around every corner to take away everything they have worked so hard to build. You won’t find many lawyers that do asset protection planning for their clients, because the lawyer is going to make a ton more money cleaning up the mess after you are attacked than they would preventing the mess. We all face disasters, such as death, divorce, lawsuits, taxes, catastrophic illness or accidents, and identity theft. Any one of these common disasters is a major asset protection threat to your financial security. If you do some asset protection planning now, you’re financial outcome following one of life’s disasters will be a lot different than it would be if you do nothing.
The concept of "ownership" is the core of all asset protection plans. The asset protection concept of "ownership" is simple. Asset protection planning usually breaks up assets between spouses or other family members. The trick in asset protection planning is to move ownership away from you and still have you control the assets and get the beneficial enjoyment of the assets.
Pretty much every home on my block is occupied by a doctor or other type of professional. A quick search of the county records will show that various trusts or people unknown to me "own" the houses my neighbors live in. Each one of my neighbors has done asset protection planning, and the "ownership" of their house isn’t in their name. The most common person to move an asset to is your spouse. If the spouse directly or indirectly owns the house, it will be protected when the business has a problem or the professional is sued for malpractice. Actually, don’t have your spouse own the house in his or her name directly, have the house "owned" by a living trust, so that you can avoid probate if he or she dies.
An attorney only has a limited number of legal tools he can use in an asset protection plan in order to move ownership of assets. Living trusts can be used to hold assets, but you should note that they don’t give you good asset protection. Having said that, you should also note that living trusts are used to move ownership in asset protection plans. Corporations are good asset protection shields. A corporation is usually thought of as a business structuring tool, but the corporation can be used to get some good asset protection in a family setting.
Corporations are mostly used as business tools, but they can be used to give a family some good asset protection and tax protection. Limited partnerships are another good asset protection tool that can be use in a business structure or a family’s asset protection structure. If a limited partnership is used in a family’s asset protection structure, it is called a Family Limited Partnership (FLP). The most flexible tool an attorney has for asset protection is undoubtedly a limited liability company (LLC).
The core of your asset protection plan should be a living trust. It needs to "own" the stock in your corporation, membership interests in the LLC, and the partnership interests in your FLP, so that there won’t be any probate when you die, estate taxes can be avoided, and management of the entities can continue uninterrupted.
Order my new book, Guaranteed Millionaire, and learn how to structure your asset protection plan with the living trust at the core. Make sure you get the FREE 90 minute DVD that is entitled Using the Law to Make Money and Protect Your Assets. The DVD alone is $19.99. It shows you all of the asset protection tools you have available today.