Asset Preservation

Asset protection planning involves figuring out and applying a lawful series of techniques that protect your assets from claims of future creditors. In cases where significant sums are involved, asset protection planning often includes setting up a series of trusts, partnerships and/or limited liability companies to hold legal title to your assets. Many of the traditional forms of estate planning can also be used effectively as asset protection techniques. Gifts of property not intended to defraud creditors remove the assets from your estate. Retirement plans have a considerable amount of asset protection built in due to federal and state law. Spendthrift provisions in life insurance contracts and certain trusts can prevent creditor attack while the assets are outside the hands of the beneficiary. Conducting business as a corporation, using limited liability companies, limited partnerships and other business entities also afford considerable protection. However, when you employ an asset protection technique, you must be careful not to trigger prohibitions against fraudulent transfers. If a court determines that a transfer was fraudulent, it could be undone, and you could be charged with a crime and face fines, restitution orders, probation or incarceration. You must be sure that the techniques you use are "legal" asset protection planning and NOT actions to defraud creditors, which are criminal. For that reason it is essential to have an attorney guide you through the process. If you are considering attempting to protect your assets through any of these techniques, contact Kaminsky, Thomas, Wharton, Lovette & Vigna to assist you.