Proactive asset protection techniques can be implemented for individuals, businesses, and as part of an estate plan. Many of our clients are very successful at generating wealth, but few know how to protect their assets from lawyers, creditors, banks, former or current spouses, children, relatives, and vexatious litigants. The lawyers at Loshak Leach LLP can create a proactive defense plan to protect your hard earned money, but you must plan in advance! If there is already a judgment entered or law suit filed against you, most asset protection techniques will not be effective retroactively.
The following are some of the useful asset protection tools that can help limit your liability and exposure to the aforementioned vultures.
Florida Homestead Exemption
The Florida Constitutional homestead exemption offers virtually absolute protection for your primary residence from the demands of creditors with some limited exceptions. Courts have liberally expanded definitions of the Florida homestead exemption to include more than just a single family house. Condominiums, manufactured homes, and mobile homes are also afforded homestead protection from creditors in Florida.
Limited Liability Company
Limited Liability Companies (a/k/a LLC) are entities which can protect your real estate investments, securities investments, and business assets while at the same time limiting the managers’ and owners’ personal liability. With regards to real estate, LLC’s are the preferred method for protecting landlords’ and developers’ investments. LLC’s also provide the benefits of pass through taxation similar to a partnership or s-corporation.
Irrevocable trusts with a “spendthrift” provision can be very effective in protecting beneficiaries’ assets from creditors. Since the grantor of the trust relinquishes all ownership of the assets transferred into it, creditors of the individual grantor or beneficiary generally cannot attach their beneficial interest in the trust income and principal. However, once established, an irrevocable trust usually cannot be changed and this inflexibility can cause unwanted consequences. Irrevocable trusts can also minimize income and estate taxes while efficiently transferring wealth to the next generation as part of an estate plan.
Annuities and Life Insurance
Florida provides unlimited protection from creditors for annuity balances and assets in cash value life insurance policies. For example, Florida statutes provide protection for “inherited IRAs” so that they can be claimed exempt from creditor actions, even in bankruptcy settings. Also, a “payable on death” account option will avoid probate administration and immediately pass to your beneficiaries.
Call the attorneys at Loshak Leach LLP today at 954-334-1122 or contact them via e-mail for a free consultation on an asset protection strategy for you, your business, or as part of an estate plan.