Protect Your Assets From Legal Action By Creditors
If you are truly interested in protecting your assets from creditors, it is important to ask an asset protection attorney to review your vulnerabilities. It is not enough to keep bankruptcy in the back of your mind as an option if debts become unmanageable. With careful, professional asset protection planning, you can keep most or all of your assets in your control but out of the reach of creditors.
At Reed Law, PLC, in Kalamazoo, our attorneys recommend customized wealth preservation strategies. Ask us about legal frameworks by which you can avoid losing your business, savings accounts, real estate and other property in Michigan or elsewhere.
Effective Asset Protection Strategies When Debt Is Pressing In
When you meet with us to discuss optimal asset protection methods for your circumstances, we will go over tactics that many other people have used successfully, such as:
- Taking advantage of exemptions: The house you live in may count as a homestead exemption in case of threats from creditors. Your 401(k) accounts are also likely protected.
- Timing asset transfers appropriately: Have you planned to give a piece of real estate to an adult child or sell part of your business interests to partners? Consult with one of our asset protection lawyers to discuss the right time to make such transfers.
- Using domestic asset protection limited liability companies and limited liability partnerships (properly designed and drafted) and filed in the right jurisdiction
- Irrevocable Trusts, Irrevocable Life Insurance Trusts, Domestic Asset Protection Trusts
- Advisory on financial tools such as life insurance, annuities and tactically managed investment accounts.
- Creating offshore trusts and using other international assets as investments: Offshore trusts and other foreign-held assets such as businesses, savings accounts and real estate in other countries have enabled many people with substantial wealth to protect wealth even in the face of aggressive creditors’ claims.
Our attorneys will advise you on how to use such methods legally and to your advantage, while also acknowledging limitations and potential disadvantages.
As you look for ways to keep your assets safe from creditors now or in the future, you will also want to want to protect your assets from lawsuits. With our attorneys, you can discuss specific strategies for shielding assets from court judgments.
Balancing Asset Protection With Financial Responsibilities
Sometimes, shielding assets from creditors means putting wealth into forms that cannot be quickly liquidated, or will incur fees and commissions in the process. These limitations can get in the way of your ability to meet financial responsibilities. An asset protection professional can help you plan for contingencies while also shielding as many of your assets from creditors as possible.
Examples Of Successful Methods Of Protecting Assets From Creditors
A comprehensive review of your assets and liabilities will enable you and your asset protection lawyer to determine which of the following might be most appropriate for you:
- Raising your contributions to retirement accounts such as an IRA or a 403(b) or 457 retirement plan (depending on your eligibility for any of these)
- Putting assets in annuities or whole life insurance policies
- Starting or reorganizing a family limited liability company or family limited partnership that will keep assets out of your name but available to you if needed
- Paying down your mortgage to take advantage of a homestead exemption
- Utilizing properly designed irrevocable trusts or domestic asset protection trusts
- Transferring assets to your spouse or vice versa depending on projected future long-term care needs
Reed Law, PLC, in Kalamazoo is known for its robust asset protection practice.
A Couple Of Common Questions About Protecting Assets From Creditors
Bring us your questions such as those below for personalized advice.
Will setting up a limited liability company (LLC) protect your assets from creditors?
Not necessarily. In particular, setting up an LLC with just one owner may do little or no good. Work with an asset protection attorney who can explore this and alternative strategies with you. Additionally, failing to properly draft an operating agreement that specifically includes asset protection language is essential for having an LLC work for asset protection. The LLC should be formed in a state that is asset protection friendly and has strong statutory language. The LLC has to be run and administered with a proper purpose.
Simply filing an LLC will not provide the necessary and complex protection that well designed domestic asset protection LLC will provide.
What if you and your siblings own a family cabin or cottage together? How can you as a family protect that asset?
One way is to set up a cottage trust that will convert to an LLC when the creators of the trust die. The family could design an LLC or LLP with detailed provisions concerning use, generational transition, and maintenance. Ask a trusted asset protection attorney to help you solve this puzzle for your family.
The examples, questions and answers above are not intended to amount to legal advice. Only a qualified lawyer who is up to date on laws specific to your assets and state of residence can give you personalized counsel.
Protect Assets From Lawsuits And Creditors: Discover Next Steps
Do not assume that the problem will go away on its own if a creditor’s communications with you are increasingly urgent and insistent. You need a professional asset protection attorney’s advice at this time, especially if you have real estate, business assets or complex asset portfolios on the line.
To schedule a consultation with a Michigan attorney about one or more creditors’ claims, call 269-242-2332 or send an email inquiry for a prompt response.