18 May Are There Ways to Protect Your Assets Other Than Using a Trust?
Are There Ways to Protect Your Assets Other Than Using a Trust?
By: Barry E. Haimo, Esq.
May 18, 2015
HAIMO: Yes. There are many ways to protect your assets in Florida without using a trust. One way is to use business entities to insulate yourself from liability pursuant to an asset protection plan. Another way to protect your assets in Florida is to take advantage of the statutory exemptions. The most significant statutory exemption is your homestead, which is your home—your primary residence—that of course, satisfies a few requirements.
The goal of asset protection planning is to safeguard your assets from creditors, debt collectors, lawsuits, and divorce. Effective asset protection involves a using a combination of business and estate planning techniques to build a protective legal wall around your wealth.
All Florida residents with something to lose—from business owners to parents to real estate owners—should at least consider creating an asset protection plan. By proactively setting up an asset protection plan, you can guard your family, business, and most valuable assets if you ever find yourself facing off against creditors and financial predators.
Asset protection laws differ from state to state. In Florida, asset protection laws are relatively debtor-friendly, and there are many lawful, effective strategies you can use to protect your assets from creditors. When it comes to asset protection, many Florida residents instinctively turn to trusts. While creating a trust is certainly an effective way to protect your assets, this is only one of many effective asset protection strategies.
Other effective asset protection strategies in Florida include:
Homestead exemption. Under Florida law, your homestead property is exempt from levy and execution by judgement creditors. Essentially, this means creditors may not force you to sell your primary residence in order to satisfy a judgment. Homestead protection covers all types of primary residences, including houses, condos, and mobile homes. To qualify for homestead exemption, you must be a Florida resident, and the property in question must be your main place of residence.
Business entities. If you are a business owner in Florida, you may be able to shield yourself from personal liability for business debts by operating your company through a business entity rather than an individual sole proprietorship. When you create a proper business entity, you generally absolve yourself from responsibility for the entity’s debts and other risks.
In order for asset protection techniques to be effective, planning should occur well before the need arises. If you are thinking about setting up an asset protection plan to safeguard you, your family, or your business’s financial future, consult with an experienced estate and business planning attorney. Your attorney can work with you to develop an asset protection plan that best suits you, your family, or business’s unique needs.
After establishing a powerful plan, your attorney can help you maintain it, periodically reviewing your plan to ensure it is in compliance with changing laws and making updates and revisions to accommodate your changing family and financial circumstances.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
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