Asset Protection Planning


Asset protection planning is one part of an advanced estate plan. Most estate planners focus on what happens to your assets after your death. Asset protection planning addresses how to preserve your assets during your lifetime and thus, “integrates” preserving your wealth not only after your passing, but also during your lifetime.  
 
Our firm provides general asset protection plans for individuals and businesses, and has also developed specialized plans for Physicians and Dentists, Farmers, Ranchers & Vintners, and Advanced Estate Tax Planning for high net worth individuals. 
 
Asset protection planning is not new. But over the last decade, it has become even more important to ensure that you have an adequate plan in place.
 
Why do I need asset protection?
 
The decline of our legal system has contributed to the need for asset protection. Over 90 million lawsuits are filed each year.  Plaintiffs and the lawyers filing these suits are seeking to make a buck off your hard work, and their numbers have grown to epidemic proportions. If you have accumulated a home, car, money or a business, you are at risk. A business failure or a lawsuit could take it all away. With 1 in 10 persons defending a lawsuit in their lifetime, it is no longer a matter of if you will be sued, but when.
 
 
Our court system is supposed to protect the innocent. Unfortunately, even if you are right, you may lose. Contributing to the problem are jurors who may not understand the facts, or who decide a case on inappropriate factors (they feel sorry for the plaintiff or they simply don't like the way you look). In addition, plaintiffs' attorneys select jurors who they feel will sympathize with their clients. How do they know who to pick? They hire jury consultants who provide them with studies about what types of persons are more likely to award large sums of money to their clients.
 
These selected juries often sympathize with a less wealthy plaintiff who has suffered a loss (such as a spouse or child, a body part, or a job). Our newspapers provide such examples: swimming pool owners pay inattentive parents whose child drowned in a neighbor’s pool; a business owner must pay an employee who stole money from the business for firing the employee and giving a bad reference. Remember the California burglar who injured himself during a burglary and successfully sued the homeowner for approximately a quarter million dollars? Or what about the jury that awarded $2.8 million to a woman who spilled McDonald’s hot coffee on herself?
 
An experienced trial attorney will tell you that proceeding to trial is akin to rolling the dice. More and more plaintiffs recover huge amounts of money from juries. Some lawyers are happy to file suit even when a case is weak, because they know it is often less expensive for a wealthy defendant or insurance company to settle than go to trial. These lawyers often receive at least 1/3 the amount recovered by the plaintiff. If a plaintiff could potentially sue several people, lawyers hire investigators to search out the wealthiest of those persons and file the lawsuit against that person. These plaintiffs and lawyers view our court system as a lottery ticket, and they are all too happy to make your wealth (no matter how modest) their retirement plan.
 
Could it happen to you?
 
Most people do not realize how quickly a lawsuit could be filed against them until it is too late.
 
Lawsuits happen to good people. No matter how careful you are in handling your affairs; no matter how kind and generous you are to the less wealthy; it is likely that a lawsuit will be filed against you sometime during your lifetime. Asset protection is financial self-defense against unjustifiable, inequitable or frivolous claims or lawsuits. If you are a business owner and a disgruntled employee who you fired for stealing from your company successfully sues you, why should you and your family lose your home and lifestyle? The answer is: you should not. The law provides many ways to protect your assets from such situations. Advanced planning is endorsed by our laws, and it is an ethical pursuit. It protects affluent and productive citizens and companies, the deep-pocket defendants who become perennial targets only because they have exposed wealth.
 
How do you create an asset protection plan?
 
A good asset protection plan will encompass much more than a simple trust or insurance. Literally hundreds of techniques exist to preserve wealth. While trusts and insurance are important parts of a comprehensive plan (and for smaller estates, these tools may be sufficient), additional planning may be needed to fully address your needs. Often, more than one tool (such as an asset protection trust coupled with a family limited partnership) should be used to best preserve your lifestyle.
 
Asset protection planning may involve financial, tax, medical and business planning. For any given estate, there are countless ways to structure a plan. A skilled asset protection lawyer will consider your goals and objectives, and custom-design a uniquely tailored plan just for you. It is therefore extremely important that you seek the advice of a lawyer who understands the specialized field of asset protection law.
 
Alexandria C. Kincaid practices integrated estate planning by addressing issues during life (asset protection planning), incapacity (elder law), and after death (traditional estate planning). If your estate is large, other professionals, such as your accountant and financial planner, will also play a part in designing a plan that is best suited for you. It may also be necessary to consult with life insurance salespersons, bank trust officers, personnel managers and pension consultants to properly plan your estate. During your consultation, we will discuss your assets, objectives, and lifetime goals. We will then devise a plan which best meets your needs, seeks to minimize state and federal taxes, and protects your assets during your lifetime.
 
More and more people are using the legal system to deprive others of their life's work.   Over 90 million new lawsuits are filed in the United States every year, many of which are frivolous or settled for sums greater than the actual liability.
 
Business owners, professionals such as doctors, dentists, lawyers and accountants, and property owners in particular should be aware of the risks associated with conducting their business, practicing in their respective fields, and taking responsibility for others.
 
Without a massive overhaul of our legal system, the risk and potential liability is not going to decline. In fact it has steadily increased over the last few decades.  Assets can be at risk due to a number of vulnerabilities, including:
 
Professional malpractice liability
Personal liability of corporate officers and directors
Lawsuits by former business partners
Personal injury suffered on your premises
Personal injury resulting from a motor vehicle accident
Liability as guarantor for the debts of another
Liability arising from misconduct
 
Asset Protection is not about giving in to fear.  It is about empowering yourself in the face of it. Our firm will work with clients to implement proven, legally-sound strategies that will help preserve their wealth and safeguard their assets. 
 
We represent professionals, small business owners, property owners, and other clients with the goal of protecting their assets against potential litigation, judgments, liens, and fraud.
 
Insurance alone does not always adequately protect against all of these threats.  We help clients protect their wealth using a variety of strategies including the use of special trusts, business entities and other legal arrangements.
 
Shielding Assets from Creditors
 
Our firm has expertise in assisting clients to arrange their finances, real property and other assets in a manner that minimizes their exposure to potential creditors.  We are well versed in establishing trusts, determining insurance needs, creating estate plans and organizing investments and business entities so that our clients are able to enjoy the highest level of confidence in terms of the security of their accumulated assets.
 
A creditor who initiates litigation against a person who has placed his or her assets into a trust, a foundation, or other entity may find that there are very few collectible assets actually owned by the person they wish to sue. Assets owned by a properly structured trust, foundation, or other entity are generally not subject to claims against their beneficiaries. In addition, placing assets into an asset protection entity may have the additional benefit of removing those assets from a person’s taxable estate.
 
We know how to evaluate current client holdings and work with our clients to identify the best ways to legally protect those holdings from a variety of creditors, whether through civil suits involving negligence or malpractice. 
 
Our firm has a solid working knowledge of:
 
Domestic and offshore trusts;
Domestic and offshore and domestic business entity formation;
Exempt asset protections under state law; and
Negotiation and preparation of pre and post-marital agreements
 
The exact strategies employed by our firm may vary depending on the client, the nature of the assets, the country of origin, and the tax regulations that apply to those assets. The ultimate goal is to protect the status of current assets in a manner that is effective, legal and ethical.

Asset Protection Planning for Physicians

With the implementation of the recent health care reform legislation and a lack of meaningful tort reform, the next decade will be extremely challenging for the medical practitioner and the medical practice organization.  There appears to be no end in sight to constant malpractice lawsuits: doctors are particularly good targets for the legions of sympathetic plaintiffs and their contingency fee plaintiff lawyers.  The detailed required medical record keeping, so necessary to receive insurance or governmental reimbursement, makes for an ideal paper trail for the creative trial lawyer. 
 
As if a medical practitioner's exposure to malpractice lawsuits is not enough, there are increasing incidents of employees pursuing practices and physician managers for harassment and other causes of action, medical practitioners being pursued for practice and business related personal guarantees, and medical practice insolvencies caused at least in part by the constant reductions of reimbursement, catastrophic practice management company deals, repayment of monies received due to improper billing, and unwise investments that befall medical practitioners on a regular basis.  It comes as no surprise that medical practitioners apparently constitute the largest category of professionals who seek bankruptcy protection in many states.
 
We understand the special needs of our medical practitioners for asset protection planning.  After analyzing your current personal and business structures, our teams will outline a plan to maximize the protection of your personal wealth.   Our assessment will address the structure of your business entity, applicable insurance policies, and the best strategies to protect your personal wealth.  Our goal is to implement asset protection tools to place your personal assets beyond the reach of creditors, discourage lawsuits by lowering your personal financial profile, and, if a lawsuit is filed, enhance your leverage in negotiating a settlement.