In today’s litigious society, just about everyone needs some level of asset protection planning. Unfortunately, more and more people are using the legal system to deprive others of their life’s work.
Whether you’re involved in a car accident, a mistake on the job, a business relationship gone sour, or you simply face unexpected financial difficulties in the future, your property and hard earned assets could easily be at risk of creditors and legal judgments. Fortunately, asset protection planning offers effective strategies to keep your family’s wealth out of reach.
Proactively Avoid Lawsuits
A solid asset protection planning strategy can help you avoid lawsuits before they ever arise. It’s no secret that plaintiff’s attorneys are less likely to take a case where the chances of recovery are slim and there are no “deep pockets” to sue. The goal of asset protection planning, then, is to lower your “wealth footprint” to become a less attractive financial target, no matter how many assets you actually own.
Limit Exposure During Litigation
In the event that a lawsuit cannot be avoided, a proper asset protection plan can help ensure a more favorable outcome in the face of litigation. When your wealth is protected using legal tools such as trusts and LLC’s, it will become apparent to the plaintiff that your assets are not readily available or near impossible to seize, thus giving you, the defendant, the upper hand in settlement negotiations.
Legal Tools To Consider
When creating a solid asset protection plan, your Morgan Law Group attorney will review a number of strategies with you including the use of trusts and LLC’s. In many situations, a Wyoming LLC will likely be the strategy of choice in providing the client with maximum flexibility coupled equally powerful asset protection provisions.
The state of Wyoming arguably has among the best LLC asset protection laws in the nation. Wyoming allows for a single member LLC to be protected by charging order, which is not typical of other states. Wyoming LLCs are private and confidential, and the laws that govern them do not allow room for interpretation. Likewise, a Wyoming Close LLC can be owned by a Domestic Asset Protection Trust (DAPT) to avoid having income frozen inside an LLC as a result of a charging order. This may allow a trustee to make discretionary distributions to the debtor’s family, and perhaps even directly to the debtor himself.
Importance of Planning Before a Crisis
For those interested in asset protection, the time to engage in planning is before any hint of a lawsuit or conflict arises. Any attempt to transfer assets after you are in distress can carry serious consequences, both legally and financially. The very act of moving assets in the heat of a legal battle for the purpose of delaying or hindering a creditor or legal opponent is called fraudulent conveyance, which is a crime. The time to move your assets is when you are not at risk. This can be safely done with the help of an experienced attorney who will ensure all transfers of assets are made properly and within appropriate time frames.
How To Get Started
Asset protection planning allows you to face future crises with confidence, knowing that your life’s work will stay insulated from creditors, judgments and total loss. If you have questions on how to implement an asset protection strategy that best meets your legal and financial needs, feel free to contact our Newport Beach law firm at (949) 260-1400 to schedule a complimentary planning session with the mention of this article.