Asset Protection Planning 202 – Structure the Right Plan
Dec 22, 2012
By: Barry E. Haimo, Esq.
Before proceeding, we highly suggest you watch the above video, and read our website content on asset protection planning at to familiarize yourself with basics and benefits of estate and business planning and asset protection. Start with this post to learn about creditors. Then read the preceding post to this one before continuing. The right structure can make all the difference.
Assuming you’re ready to proceed, determining what structure to form as part of your asset protection plan for your family and your business depends entirely on your particular circumstances, both personally, professionally and with respect to your business.
As you now know, the basic framework or structure of a general asset protection plan involves utilizing multiple business entitles and trusts. The idea is to insulate and isolate your personal and business assets, not just from each other, but from the assets themselves. This is why we refer to it as a structure. The effect of this is to compartmentalize the liability exposure that can arise from that asset and minimize the vulnerability of that asset being levied to satisfy a judgment. You may want to employ several types of entities, some of which may be owned by other parent companies or revocable and irrevocable trusts. There are many different ways to skin a cat and it depends entirely on your circumstances and goals.
That being said, there are two requirements for the structure of an asset protection plan to be done properly: first, you want to give creditors an uphill battle by forcing them to penetrate multiple entities and exhaust financial resources attempting to find the “shell” so to speak. Second, you want to make sure this plan is crafted and drafted properly. Remember, small mistakes have huge consequences. You don’t want any Trojan horses in your structure.
The first step in asset protection planning is to decide that you no longer want to keep your hard-earned money and property on the table vulnerable to creditors. The second step is to find the right attorney. Third, you want to create the plan for the appropriate structure. Each business entity and trust used will require formation, obtaining tax identification information, drafting proper governing documents, assignments and stock powers to transfer ownership interests and deeds (and recording of deeds) to validly transfer ownership of real property. Given the significant overlap, the next step is to integrate the ownership of these entities into a well organized estate plan. This ensures that both your business and your estate transitions swiftly, smoothly and seamlessly for generations. It’s a no-brainer from a cost-benefit standpoint. The bottom line for your asset protection structure is this: do it well, and do it right and you’ll sleep better at night. Call Haimo Law so we can help make that happen.
Read the next post on asset protection here: https://www.haimolaw.com/asset-protection-planning-303-strategies-pitfalls/
Author:
Barry E. Haimo, Esq.
Haimo Law
Strategic Planning With Purpose
Email: myplanning@haimolaw.com
LinkedIn: http://www.linkedin.com/in/bhaimo
YouTube: http://www.youtube.com/user/haimolawtv
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