Asset Protection FAQ's

The goal of asset protection mechanisms is to shield assets from creditors.
Asset protection aims to isolate you from the legal title to your assets while, at the same time, you continue to control and economically enjoy your assets.
No, but most plaintiffs are highly discouraged to sue once they realize that an effective asset protection plan makes it impossible to reach your assets.
The short answer is: everyone. In particular, professionals such as doctors, lawyers, accountants, architects or any other person exposed to professional liability should consider how their lives would be affected by a multi-million dollar lawsuit.
A fraudulent transfer occurs when a debtor makes a transfer or incurs an obligation with actual intent to hinder, delay or defraud a creditor, or when a debtor receives less than reasonably equivalent value for the transfer or obligation and the debtor is insolvent or is reasonably expected to become insolvent.
Yes, absent fraudulent transfers, asset protection is recognized as sound, legal, and ethical estate planning technique.
No. Living trusts provide zero protection from creditors. Wills only come into place upon death.
The problem with hiding is that the game is over when assets are discovered. Sophisticated creditors will depose you under oath and let you reveal your hiding places under threat of perjury. Asset protection allows you to tell creditors where your assets are, but the asset protection mechanisms make your assets unreachable for creditors.
No, a court will likely consider this a fraudulent transfer, undo the transaction, and punish you.
It depends. In community property states each spouse is deemed to own all of the community property assets. Thus, if either spouse is sued, all of the spouses' joint assets are subject to enforcement unless one spouse opts out of the community property system. In non-community property states, the separate property of one spouse is not subject to creditor claims of creditors of the other spouse.
Yes, they insulate one person from his/her assets, which is the ultimate goal of asset protection.
Only in Texas and Florida are the homestead exemptions unlimited.
LLCs may shield your personal assets from business liabilities, but LLCs do not protect the business.
A family limited partnership is a partnership where all the partners are family members. Consequently, a family limited partnership works in exactly the same way as any other limited partnership or limited liability company to protect your assets.
Yes. Most creditors will not be motivated to sue or enforce in foreign jurisdictions.
Off-shore trusts render liquid assets unreachable.
First, U.S. citizens and permanent residents must assume that the IRS is watching such transfers closely and may intervene. Second, foreign trusts require clients to hire counsel in these foreign countries, which may create linguistic, logistical, and monetary complications.
None. Foreign trusts are treated in exactly the same manner as domestic trusts.
Absolutely. Relying on insurance policies could be fatal if your alleged wrongdoing is not covered (or so the insurance company argues). Rarely, insurance policies cover all damages.
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