Asset Protection Planning
The demand for asset protection planning can exist for a variety of reasons including impending lawsuits and the need for long term care on the part of the asset holder. A concern over pressures from creditors might drive some individuals to seek legal counsel to see if any of their assets are exempt from collection. In some cases a home and its furnishings, along with some personal items, may be protected. Since each case will vary, it is wise to consult with legal professionals who are experienced in this particular field. There may be certain actions that a client will need to complete in order to protect their homes and belongings from creditors. For anyone who has worked hard to obtain and pay for a home, the idea of having a place of residence taken away to pay for medical bills or other debts is not a pleasant one.
For families that have spent a lifetime paying for a home, not being able to leave that home to their heirs can be heartbreaking. But this happens all too frequently when health issues dictate that the homeowner seeks long term nursing home care. Effective asset protection planning can make a big difference in the fate of this treasured property as well as other belongings that are the fruits of a lifetime of work and sacrifice. In many cases, a family will own certain items that they wish to pass down to the next generation. Family heirlooms such as jewelry or other items may not necessarily need to be sacrificed. Some assets such as retirement plans, pensions or 401k's may be off limits as well. However, a family may be unfamiliar with their rights in these cases. Advance preparation is very important when these difficult life issues are looming. For this reason, the services of an expert in asset protection planning is called for.
There are some specific cases that may call for asset protection planning. Obviously, those with a great deal to loose will benefit the most from the services of experts in this area of law. A failure to develop a wise plan of action can result in the loss of much in the way of valuable property and belongings. Those who are well off financially are much more at risk of loosing valuable assets through poor advance planning. In addition to the very wealthy, anyone who has a major financial issue on the horizon will need to take advance steps to deal with these issues before it is too late. For example, if someone knows that they are likely to be named in a lawsuit, there may be precautionary steps that they need to take. If an elderly person is facing the possibility of the need for long term medical care, families will often consult legal professionals who are experienced in protecting assets from the prohibitive costs of this necessary care. Additionally, anyone who is at a high risk of attracting a lawsuit due to their profession may need asset protection planning. Such professions could include law, construction, finance, or the medical profession.
It is not uncommon for those who are facing long term medical care to see a lifetime of work and earnings poured into the costs of this care, leaving nothing behind for children and heirs. The expenses that are incurred by a long term stay in a medical nursing facility are generally not covered by insurance unless specific policies geared to cover this need have been purchased. Many families have been forced to sell off the family home and liquidate treasured assets to insure that their loved one received the care that they need. Often a spouse will face the loss of valuable assets when a husband or wife enters a nursing home. Professional asset protection planning can make a huge difference in these cases.
Each state will have different regulations when it comes to asset protection planning and qualifying for federal aid. If an individual is in need of long term nursing home care, the law allows a certain amount of assets in different situations. For example, if an individual's spouse is still living, that spouse will need money to live on. Due to this fact, the amount of monetary resources that are allowed will be considerably more than what is allowed for a single person. Similarly, the rules will differ when both spouses are in need of nursing home care. The Bible points to God as a source of hope for believers. "And now, Lord, what wait I for? My hope is in thee." (Psalm 39:7)
It is not only spouses and heirs that may benefit from asset protection planning when a loved one is facing the loss of valuable assets. If a disabled child or loved one is part of the scenario, legal professionals can help families craft a plan that will see to the needs of this individual and seek out ways to provide for any care that may be needed. There may be a wide variety of approaches that a family could take to effectively protect property and other assets. An experienced professional will be able to guide family members through these choices and also make recommendations as to which plan might be the best fit for their particular case. It is then up to the client just what step to take next, but the benefits of a careful strategy to defend the fruits of a lifetime hard work speak for themselves.
Personal Asset ProtectionPersonal asset protection is a plan to protect one's possessions in the case of a civil lawsuit judgment that goes against him. Liability lawsuits are a common practice against many professions whose activities imply a large risk. Doctors, pilots and other professionals whose activities can put them at risk need to have personal asset protection in the event that a financial lawsuit judgment is more than their insurance coverage. For example, if a physician is sued for five million dollars and his liability coverage is only four million, he could lose his house and all personal possessions. Yet it is not just the doctor or pilot who has the risk of losing his home and possessions. In the event a person is in an auto accident and is sued for being the cause, the final financial judgment could be much more than the liability coverage a person has to protect them. And in this case, a person's house could be taken along with all belongings.
Without a doubt, a higher ceiling of liability protection is the best defense against property seizure. Most people opt for a low amount of personal asset protection or liability coverage on their car insurance policy, simply to lower the premium payment. This is understandable, but for a few dollars more each month, the liability protection could be raised considerably, and that might be the difference between keeping and losing a person's personal property in the case of a tragic circumstance. A person needs to rethink their insurance issues if they have a large personal estate and very low liability coverage. This high low ratio is just a rotten circumstance waiting to happen.
If a higher car insurance premium is not possible within one's budget, there may be some ways to remedy that situation. A thorough examination of all non-essential expenditures may provide some extra cash somewhere. Enjoying one less meal out a month, having basic cable instead of premium packages or other innovative methods of cutting costs may allow a person to afford a much higher liability ceiling on their car insurance. There may even be enough to help raise that same personal asset protection on one's homeowner insurance, which is another target of litigation action. In the haunting specter of losing one's house, how many people wouldn't trade a night of eating at home for the ability to keep and maintain their residence?
One of the actions a person might do to maintain a residence in the result of a liability suit is to file a Declaration of Homestead. This is a simple legal document that can be filed quickly and with just a few dollars and can go a long towards protecting one's residence. This filing is legal in twenty seven states and they are designed to protect, at least to a point, the family home. Certain percentages or amounts of the value of the house, varying from state to state, are protected by the Declaration of Homestead Act that people file. This amount is not a lot of money, sometimes as little as five thousand dollars or so, but it does provide some personal asset protection. If such a horrible thing would ever happen to you, could you forgive the person who might try and take your house or your family's savings? Jesus said, "Love your enemies, do good to them that hate you, bless them that curse you and pray for them that despitefully use you." (Luke 6: 27, 28)
If a person owns a business, there is no doubt that personal asset protection ought to be a high priority. Any accident on one's business property or any action taken by an employee that brings risk to another person could eventually result in the taking of a person's own property as part of the judgment. But this can be mitigated by having in place asset protection plans that are usually put together by an attorney with experience in this field. Many things can happen that are outside the control of the business owner. The ability to have peace of mind that at least a person's own place of residence and personal savings accounts are covered behind a shield of safety is certainly worth the price of attorney fees. Trying to move assets around after an incident occurs can be construed as fraud.
Look into the possibility of getting one's business approved as a Nevada corporation. This state is tax free and does not report any income to the IRS, thereby not allowing creditors an opportunity to look into legal books. This state also protects business owners from personal liability against actions committed by their corporation. All of this is legal and above board, but not all businesses may qualify to have themselves set up under this particular state's protection. Offshore banks accounts are also a way that many business owners try and gain personal asset protection from those who might sue them in the event of litigation.
The offshore account is one "homemade" way to try and achieve personal asset protection. When set up a particular way, all offshore assets are private and not subject to any US laws. This allows the business owner to have peace of mind that at least his savings can be protected, if not his residence. Many elderly people transfer money over to relatives so that upon receiving Medicaid insurance they do not have to turn their savings over to the state of residence. This also is a legal form of asset protection.