Protect what you’ve worked so hard to accumulate from predatory lawsuits.
An asset protection plan can do just that.
While a revocable living trust is a great tool to avoid probate and protect the property you leave your heirs from unnecessary taxes and creditor claims, it does not protect you from potential creditors.
If you want asset protection for yourself, additional planning is required.
There are various levels of asset protection – from a single-member LLC to protect against the potential liabilities of a rental property to offshore trusts designed to protect your liquid assets like cash and investment accounts from future aggressive creditors.
We can help you:
- Identify your personal “risk tolerance” level – which risks you are willing to live with and which risks you aren’t
- Decide on an asset protection plan you are comfortable with by balancing what we refer to as the “3 C’s”: Cost – Complexity – Control
- Implement the legal structure that will provide the level of protection you want for a fixed fee that you’re comfortable with
What are the benefits of asset protection?
Your real estate, financial accounts and business interests are often your most valuable possessions. If you own these assets personally or in a revocable living trust, they are vulnerable to your creditors.
If you legally transfer these assets to a properly structured LLC, partnership, irrevocable trust or offshore trust, you can shield them from attack.
You want to also make sure your structure allows you to retain the use, control and access to your property. As John D. Rockefeller used to say, “Own nothing, control everything.”
Other benefits include:
- Enhanced income and estate tax minimization opportunities
- Integration with your overall estate plan
- Mentoring opportunities by involving your children/heirs
- Dynasty planning – perpetuate your structure over generations
What are the potential drawbacks?
Do not try this at home. A “do it yourself” approach to asset protection can have serious negative tax consequences and get you in trouble with the courts.
Professional guidance from an asset protection attorney can help prevent:
- A false sense of security – thinking you have protection that you don’t actually have
- Fraudulent transfers – transferring property after the fact to delay, hinder or defraud a creditor can get you into trouble with the judge
- Loss of control – unintentionally transferring assets in a way that causes you to give up management and use of the asset
- Unfavorable tax consequences
Hiring an experienced attorney who knows how to navigate the minefield of advanced legal planning is crucial. We’ve seen our clients’ asset protection plans hold up in pre-litigation, litigation and bankruptcy proceedings.
What is the setup process?
The first step is to work with you to design an asset protection plan that accomplishes your objectives while balancing your tolerance for cost and complexity. We create a custom written diagram for you so you and your other professional advisors can easily keep track of all the moving pieces.
The next steps are to:
- Consult with your other professional advisors and get them on board with the new plan
- Prepare state filings
- Integrate new entities within existing estate plan
- Draft internal documents such as trust agreements, operating agreements and partnership agreements that explain how your entities will be run
- Prepare tax filings
- Transfer your real estate, financial accounts and business holdings to their proper entity
Our firm takes care of all the paperwork in consultation with you, freeing up your time to take care of other areas of your business.
How will this work with your estate plan?
Many of the same tools that are used to avoid probate, minimize taxes and transfer your property to your heirs in a private, orderly, tax-efficient setting are the same tools used in an asset protection plan.
It’s how these pieces are integrated with each other that provides much of the protection.
Your asset protection plan will be fully integrated with your existing estate plan to make sure your property is not only protected while you are alive, but also after death.
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When it was time to update our estate plan we turned to Kent Phelps. We were only two days away from an extended trip overseas and needed it done fast but done right – especially with a child who has special needs. Our documents were completed, signed, notarized and witnessed in a day! And we were confident it was done right because we had the help of an experienced attorney. So grateful to Kent for going above and beyond so we could enjoy our trip with peace of mind!
We had known for many years that we needed an estate plan but just never got around to doing it. Our son hired Kent Phelps to do his estate plan and encouraged us to contact Kent and get it done – so we did! We immediately felt like Kent “got” our unique family situation and knew just what to do. We wish we had done this sooner but what a great feeling it is to know that what we’ve worked so hard for all these years will be protected and go to the right people when it’s our time. We highly recommend Kent to anybody who needs an estate planning attorney.
Amazing In Every Way! Kent was amazing. He excelled in communication, and he was very understanding and listened to our unique situation. He explained everything in detail and was an amazing advocate for what we wanted to do. I would highly recommend him and his services.
We were looking for an estate planning attorney and were referred to Kent Phelps by a friend. We felt like he really listened to us as we talked about our family and business and what we wanted to accomplish. Kent took the time to help us understand how living trusts and LLC’s work and how they can help protect our family and property. The fixed fee approach was also very appealing to us. We were excited when we received our estate planning and LLC notebooks! Being able to have instructions in our trust that make sure our children receive what we leave them in a way that will truly help, rather than harm them has given us the peace of mind we were hoping for. So grateful we found Kent!
Mr. Phelps has provided exceptional work and advice. I have recommended many family and friends to Mr. Phelps because of his professionalism.
Kent’s unique perspective and focused expertise set him apart from his peers. His willingness to completely understand his client’s goals, and only then offer appropriate suggestions is refreshing. With an ability to take complex asset protection strategy and explain it in common context, it is easy to recommend him.
Mr. Phelps’s services have been used to handle some amendments to business documents following my divorce. The amendments were thorough and filed in a timely manner. While this was a simple transaction, I fully expect the same level of effort on complex transactions. I highly recommend Mr. Phelps for legal needs.
Kent has ideas and solutions that were very valuable to us. I have recommended Kent and his firm to many of my associates.
Kent is an exemplary advocate for his clients. It is an honor to have worked with him and witness his high ethical standards.