Asset Protection Is Actually Wise When Not Being Pursued By Creditors
Whether you have assets as a consumer or a business owner, it is important to consider asset protection before you are in a situation where creditors are pursuing you. Indeed, advance asset protection planning can be extremely beneficial to individuals and businesses alike in the event that you begin struggling to repay debts and are facing collection actions or lawsuits from creditors and debt collectors. Business owners of corporations or LLCs also should consider asset protection in the event that a business lawsuit ultimately leads to individual liability. To be sure, even with business entities where liability protection exists for individual owners, circumstances can arise in which corporate executives are subject to personal liability.
What types of asset protection strategies can you consider? Our West Palm Beach business law attorneys can help with asset protection strategies for individual consumers and business owners alike.
Consider Asset Protection Trusts
Asset protection trusts in Florida can be extremely helpful for protecting your assets. According to an article in Forbes, asset protection trusts are “the most affordable asset protection tool” available to most individuals in Florida and throughout the country because these types of trusts allow you to protect your assets from creditors while ensuring that your heirs will receive those assets when you pass away. Asset protection trusts can also protect an individual’s assets in the event that person needs Medicaid coverage for long-term care in a nursing home. What do you need to do to set up an asset protection trust in Florida? The trust must be set up as an irrevocable trust, meaning the person making the trust cannot change it or close it once it has been established. A lawyer can assist you with the process.
If you are a business owner of a sole proprietorship or any type of professional practice, purchasing liability insurance can be an effective asset protection strategy. For example, malpractice insurance can protect certain types of professionals against lawsuit damages, and other liability insurance policies can protect your assets in the event of a lawsuit.
Choosing a Business Entity with Liability Protection
Some businesses provide liability protection for individual business owners while others do not. If you are forming a new business and asset protection is among the most important issues, you should know that corporations offer owners the most robust protection from personal liability, as the U.S. Small Business Administration (SBA) explains. Other types of business structures can also provide liability protection for owners so that their individual assets are protected, including limited liability companies (LLCs), and certain limited partnerships.
Put Your Assets Into a Retirement Plan
If you are concerned about creditors coming after you for individual or personal debts, or if you have concerns about personal liability for your business, placing assets into a retirement plan will often provide you with asset protection unless you owe certain types of debt (like tax debt or family support payments).
Contact a Business Lawyer in West Palm Beach
If you have questions about asset protection or need assistance developing an asset protection strategy, one of our experienced West Palm Beach business lawyers can assist you. Contact Kelley, Fulton & Kaplan for more information.