Asset Protection Planning is proactive legal action that protects your assets from future creditors, divorce, lawsuits or judgments. This involves a series of legal and lawful techniques that than deter a lawsuit, provide settlement negotiation power and prevent the seizure of your assets in the event of a judgment.
The key is to asset protection is to recognize a risk then assess whether to accept the risk or shift it. Equally important is that any steps to protect assets must be prospective. There are laws that protect creditors from "fraudulent conveyances"if the threat and the steps to protect your assets are too close in time. You take action all the time that is, to a greater or lesser extent, "Asset Protection." Common examples involve the purchase of car, homeowners, and health insurance, and, to a lesser extent, disability and life insurance. Also important to consider is an "excess coverages" or "umbrella liability" policy.
In Florida, certain assets have protective status from most creditors (except the IRS). This includes the homestead exemption that provides creditor protection and a reduction in property taxes. In addition, annuities and cash surrender value in life insurance is protected. Further, financial accounts titled in the name of a husband and wife are have a special designation as "tenants-by-the entireties" property.
One area that remains a source of confusion is whether a trust set up by an individual for his/her own benefit (i.e., a "Self-Settled Trust") provides protection from creditors. In Florida the answer is "no." However, other jurisdictions within and without the United States offer such trusts, that, under the local law, afford some measure of protection. While not a common technique, there are circumstances under which the use of such a trust may be warranted.
Call NOWAK LAW GROUP today to learn how Asset Protection Planning fits into your LIFEPLAN.I
ASSET PROTECTION PLANNING
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