18 May Do I Have to Employ Asset Protection for All Types of Assets?
Do I Have to Employ Asset Protection for All Types of Assets?
By: Barry E. Haimo, Esq.
May 18, 2015
BARRY HAIMO: Asset protection is best utilized to protect your assets in general. To the extent that you have specific assets that are in businesses, or artwork and other types of things, you want to consider asset protection more generally, which will include all of these types of assets.
In certain situations, the assets you leave behind in your estate may be vulnerable to outside interests. Creditors may target your estate to settle debts, and “asset protection” refers to the legal protection you can employ to thwart their attempts.
Asset protection is an essential part of protecting your life’s work. It should be employed, to one degree or another, in any estate plan. This means whether you are leaving behind a family fortune or a small nest egg, you should plan to use some form of asset protection.
It’s relatively easy and inexpensive for lawyers to file lawsuits seeking to drain your estate of its assets. These external forces threaten your and your family’s life work and investments. Judges and juries may be swayed into ruling in favor of creditors—even if the assets rightfully belong to you, your family, and your heirs. It even costs money just to defend meritless claims.
A strong asset protection program forms a legal barrier between outside interests and your estate. Ideally, there should be multiple layers of these asset protections in place. This insures if one level of protection fails, there will be back up protections in place to deflect legal attacks.
Fortunately, Florida has some of the most liberal asset protection laws in the United States. The laws protect people if used properly, and they apply to any permanent resident of Florida, and may extend to anyone who owns property in Florida.
Talking to a knowledgeable estate attorney can help demystify the process of asset protection. Your attorney will be able to inform you which asset protections to employ for each asset you are looking to protect from creditors.
Florida law has many different statutes in place to protect a myriad of different asset types from external attacks. One of the most well-known and powerful asset protection statutes is the Florida Homestead Protection. Likely the best asset protection tool in the country, homestead protection is outlined under Article X, Section 4 of our State Constitution.
Under this statute, creditors cannot liquidate a debtor’s homestead in order to collect a debt or settle a judgement. Florida law considers a wide variety of property to fall under the definition of “homestead” – these protections are not limited to a single-family home. Manufactured homes, condos, and mobile homes can all be protected under Florida statutes. Under the law, a homestead is defined as your primary place of residence.
One of the primary reasons homestead protection is so powerful is it does not provide any financial limits. Florida residents can spend unlimited funds on their primary home, and all of the value they instill in their homestead is exempt from the attacks of creditors.
Homestead protection is just one of many tools you can employ to protect your life’s work from creditors and frivolous lawsuits. You can also use financial vehicles, business entities and trusts.
Consult a knowledgeable attorney with a strong background in estate law to keep your assets out of the hands of creditors.
Barry E. Haimo, Esq.
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