Using LLC's for Asset Protection
One way to protect your assets is by creating a family limited liability company(llc) for asset protection. If you are scrupulous about keeping your personal and business assets and bills separate, then business creditors will be limited in what they can get. It should be noted, however, than this in itself isn't foolproof.
If you're a doctor and you're sued for malpractice, having an LLC may or may not help you. If you're sued over a personal act, such as negligence, then they probably can come after your personal assets.However, if the tenant at your rental property breaks his leg and sues you, he generally wouldn't be able to claim your personal assets if your rental is in an LLC. Which is why limited liability companies are popular with real estate investors.Then there is the domestic asset protection trust, currently available in six states including Delaware and Alaska. You set up a trust with guidelines for how assets will and will not be disbursed, appoint a trustee in the other state and transfer the assets. For example, if a plaintiff wins a suit against you and then tries to get payment from those assets, your trustee may refuse if your guidelines don't include payouts for settling lawsuits.This is a preventive thing. It,too, is untested in court. The trust must be established before there are any claims, or any hints of claims, or it's a 'badge of fraud. Moving assets to defraud a creditor nullifies the transfer.The same rules about fraudulent transfers apply to the period before you file for bankruptcy protection, and people run afoul of them all the time. If you file, you are allowed to keep some assets, up to limits set by the state. For example, in the state of Oregon, a single person can keep $25,000 equity ($33,000 for couples) in their home; $400 ($800 couples) in cash; $1,800 ($3,600 couples) for clothing and jewelry; $1,700 equity in a car; and other items. In the state of Washington, exemptions are slightly more generous and bankrupts have the choice of using state or federal limits.
If you're considering bankruptcy and are wondering about asset protection, consult a bankruptcy attorney before doing anything.
ASSET PROTECTION EDUCATION
- State Laws
- Umbrella Insurance Policy
- Asset Protection Ethical And Moral
- IRA Private Letter Ruling
- Asset Protection Key Concepts
- Family Trust
- Choosing An Asset Protection Advisor
- Transfer Assets To Your Spouse
- Asset Protection FLP
- Asset Protection Privacy
- Asset Protection Facts
- LLC ASSET PROTECTION
- Spendthrift Trust
- Reasons For Asset Protection
- Asset Protecting
- Types Of Trusts Spendthrift
- LLC For Asset Protection
- Types Of Trusts
- Asset Protection
- Case Study
- Asset Protection Concepts
- Types Of Trusts QTIP
- Delaware Trust
- Dynasty Trust The Basics
- Asset Protection Bankruptcy
- Protecting Your Assets
- Asset Protection Education
- Asset Protection Ethics
- Asset Protection Lawsuit Prevention
- TrustMakers Forms Center
- TrustMakers Site Map
Learn more about protecting your assets with these articles:
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