KENTUCKY ASSET PROTECTION ATTORNEYS
With the uncertain economy that we are living in today, there is no better time to think about protecting what assets you currently have. Whether you own a business, have real estate, or have your life savings that you want to protect, there are tools you can use to help safeguard these assets from others. In order to determine what protection tools are best for you, it is important to have an attorney experienced in estate planning and asset protection evaluate your assets. Estate planning is one way for you to protect your assets. In these hard times, you need to protect what you can.
Most assets could potentially be touched by creditors if you owe debt. There are, however, some assets that are exempt from creditors, such as life insurance proceeds, IRAs, and proceeds derived from an annuity contract, among others. Because most assets are reachable by creditors, you should consider protecting them in the best way possible. Further, not only are creditors able to reach your assets, but if you are sued and someone gets a money judgment against you, that judgment will go after some of your assets if they are not properly protected.
A starting point to asset protection is to ensure that any business assets you may have are completely separate from your personal assets. Once you mix the two, creditors of your business may be able to reach your personal assets to satisfy particular debt your business owes.
DIFFERENT TYPES OF ASSET PROTECTION
If you have a business, the type of business entity you choose can help protect your business assets. For example, if you are a sole proprietor, you are exposed to your business’ liability. However, if you form a limited liability company (LLC), you, as a business owner, are shielded from personal liability for the business’ debts. Setting up an LLC or another form of business entity that limits personal liability is a good way to protect your personal assets should your business have substantial debt that cannot be paid by the business alone. It is easy to set up an LLC and other business entities in Kentucky, such as a limited liability partnership (LLP), or corporation.
If you do not have your own business, but have assets you want to protect for the benefit of your family members, you may consider establishing an irrevocable trust. Once you place your assets in an irrevocable trust, you do not have legal title to that property anymore. This can be good and bad, but if you know for sure that you want your assets to pass on to certain family members or beneficiaries, an irrevocable trust is a good way to protect this property from creditors. See our trusts practice area page for further information on different types of trusts.
You may also consider the family limited partnership (FLP). This type of partnership is used to pass on assets from one generation to another. Just like with the typical partnership business model, there are general partners and limited partners. The general partners are responsible for managing the partnership and its assets while the limited partners have an economic interest in the partnership. An FLP is essentially a business model for a family to keep track of and protect assets.
PLAN EARLY
You should plan now for the potential that someone or some entity may go after your assets in the future. You cannot wait until the unfortunate event of a lawsuit being filed against you. If you seek to protect your assets after you are sued, this could be seen as fraudulent and could leave you in a world of trouble beyond being sued. If you plan ahead and protect your assets, you will be prepared for any situation that may arise.
Think of asset planning as a form of insurance. Although asset protection does not replace insurance, you can think about it in such terms as a way to better understand the process. You are insuring your assets against something that will probably not happen, but if it does, you are already protected. For example, if you do not have health insurance and you become very ill, you will be liable for a mountain of medical bills. You cannot seek to obtain insurance AFTER you become sick. You could have avoided paying the thousands of dollars of medical bills had you purchased health insurance before you became ill.
DON’T HIDE YOUR ASSET PROTECTION PLAN
Any asset protection plan you may have should be out in the open, meaning that it should not be done in secrecy. For example, if you have offshore accounts and hide these assets from creditors, it may be deemed fraudulent even if that is not the true purpose of the offshore accounts. If you have legitimately set up asset protection tools, such as irrevocable trusts or family limited partnerships, you are abiding by the law then there is no harm or shame in creditors knowing about these arrangements. It is only when you intend to hide something that problems arise.
Also, simply putting your assets in your spouse’s name does not guarantee that they will be protected against creditors. Creditors may still be able to get to your assets if it is clear the assets were transferred for the sole purpose of avoiding creditors. Anything you do that has the slight possibility of being considered fraud is a bad idea. If you have any hesitancy when making a decision, you should consult with an asset protection and estate planning attorney as soon as possible to ensure what you are seeking to do is legal under Kentucky law.
CALL OUR OFFICE TODAY FOR A FREE CONSULTATION
To speak with one of our highly skilled asset protection and estate planning attorneys, call the law firm of Goeing Goeing & McQuinn today. Our attorneys will sit down with you and diligently look at what assets you have to help you find the right answers when looking to protect your assets. Our attorneys are standing by to help you plan and prosper for the future. To schedule your free consultation with one of our attorneys, call our office at (859) 904-2045.