If you want to protect your assets, you should be proactive by making a plan sooner rather than later. Yahoo’s recent article entitled “How to Protect Your Money, Even If You’re Not Rich” says that contrary to what many people believe, asset protection planning isn’t just for the wealthy. The estates of anyone, in any income group, can be sued or suffer from hefty taxation.
Asset protection planning can help mitigate the impact of creditor claims and other issues on your wealth. This is accomplished by creating some legal separation between you and your assets. However, if you have substantial debt and few assets and you are subject to a lawsuit, it may actually be better to file for bankruptcy than to create an asset protection plan. That’s because it’s only worth it if you have significant assets, although some events cannot always be protected against. These events include tax liens, mechanics liens, alimony judgments, and child support claims.
An asset protection plan benefits these people the most:
- Anyone with a significant amount of assets.
- Anyone with a significant, recurring amount of credit card debt.
- Homeowners underwater on their mortgage (your mortgage balance is greater than the value of your home).
- Anyone whose profession carries with it a high probability of liability, such as doctors and attorneys.
Some assets aren’t subject to creditors, such as retirement accounts under the protection of the Employee Retirement Income Security Act of 1974 (ERISA). In Florida, your primary home is also protected from creditors—at least certain ones. You may legally preserve at least a portion of your home equity. Homes can also be put in another individual’s name.
Meet with your estate planning attorney in Davie, Florida to get started on an asset protection plan that will allow you to shelter your assets from creditors, safely and legally.
Reference: Yahoo! (Nov. 6, 2022) “How to Protect Your Money, Even If You’re Not Rich”