Even if you have spent your entire career working hard to ensure your financial security and the security of your loved ones in the future, your assets could be under attack at a moment’s notice. It can be hard to protect your financial holdings and physical assets from every angle once that happens. For people in high-risk professions like medicine and health care, or people who invest in business and real estate, or even those going through messy divorces, asset protection plans are critical to keeping them and their families from financial ruin.
Asset protection plans typically share a few common “first steps” for people to take when considering how best to set up their lines of defense. Below, we discuss a few of these steps as well as the best ways to take them.
- Plan ahead. The time to protect your assets is not after a malpractice lawsuit has been filed or a business deal has fallen through. You should start making your plans as soon as possible, even before there is a need for a protection plan. Asset protection actions that are taken after claims have been filed run the risk of being considered “fraudulent conveyances,” and could result in nullification or forfeiture of the assets altogether.
- Consider all your options. While it may seem like a huge ordeal to set up an asset protection plan, once you get down to it and figure out what you need, it can be fairly simple. Often, insurance coverage can be purchased to protect against risk. If that’s the most affordable option, and offers the coverage you need, you might be able to use that insurance policy as your primary (or even only) protection option. If insurance coverage isn’t going to give you what you need, then you need to move onto other options—transferring assets to a loved one, purchasing real estate, segregating your assets into corporations, limited partnerships, etc.
- Plan carefully. It sounds pretty obvious, but the best plan is one that considers all the angles and as many potential outcomes as possible. One huge complication to keep in mind is taxes—making various transfers can have unwanted tax consequences (gift tax, for example), or could go against the terms of your existing estate plan. In addition to talking with your attorney, you can get a tax advisor’s opinion on how best to avoid these complications.
Best Step to Take – Talk to an Attorney
A thorough asset protection plan takes time and effort to ensure that your financial future is protected no matter what happens. At Lubell Rosen, our New York asset protection lawyers can take you through your options for asset protection and help you determine the best steps to take. Following the guide above will give you a good start, but it’s best to make sure your asset protection plan is sound and meets all the legal requirements to avoid trouble down the road. For more information or to discuss your options, contact one of the attorneys at our firm today.