The Asset Protection Planning Process in Idaho
Protecting your personal and professional assets and wealth from unforeseen liability and claims in the future has long been part an integral of many different types of discussions such as, for example, how to legally form your business or profession, how to protect a child from future creditors, or even how much insurance is needed for a car or home. Also, both Federal laws and states' laws offer numerous protections. At the Federal level there is the Bankruptcy code and ERISA statutes. All states exempt certain property from claims of creditors and all states' trust laws protect certain types of beneficiaries from certain classes of creditors.
Good asset protection planning tailors the many types of protections available to your specific situation. It is responsive to your exposure to future claims, risk attitude, needs, and objectives and integrates the various techniques in a way that is responsive, flexible, and as comprehensive and legally reliable as possible.
The asset protection strategies we develop for our clients are not "off-the-shelf", but instead respond to your specific situation. That said, there are various techniques that can be used including:
- Bankruptcy, ERISA and state exemptions
- Separating low and high risk assets
- Taking advantage of laws, in other jurisdictions, that provide greater protection from creditors than the state in which you live or work
- Using LLCs, limited partnerships, and trusts to limit risk
- Using prenuptual and postnuptual agreements
- Stripping equity from assets
Timing and Substance is Important
The breadth of alternatives available depends on whether a claim is only speculative or whether it is imminent. The closer you are to a judgment being sought or rendered, the less likely your assets can be shielded without running afoul of fraudulent conveyance laws.
If asset protection is not simply used to foil creditors, but instead is part of your business and estate planning, it is more likely to be effective and defensible.
Our approach to asset protection planning is holistic: we seek to fully understand our clients and we endeavor to have our clients understand the legal framework of applicable asset protection laws and cases so that asset protection planning becomes part of every day business and personal decision making.
When we address potential personal liability, we begin with an assessment of your assets, liabilities, past claims, current exposure to claims (from different type of creditors), current sources and uses of income, future (including retirement) needs for income, estate planning objectives, level of risk aversion and attitude to legal complexity. If you are married, then our analysis will address the stability of your marriage and willingness of your spouse to be a part of the asset protection plan. If you own a business or engage in a profession, then the analysis will include, at a minimum, the nature of liability in your business or profession and your ownership interest. If the business entity itself is part of, or the focal point of, the asset protection plan, then the analysis will include obtaining the profiles, and involvement, of each partner and a full examination of the operations of the business.
Our objective is to fully understand your exposure to future claims, risk attitude, needs, and objectives in order to integrate the various techniques in a way that is responsive, flexible, and as comprehensive and legally reliable and responsible as possible. We also strongly recommend that our clients' tax, accounting, and investment advisers work with us throughout the asset protection planning process. This enables us to more fully understand clients' current situations, access additional areas of expertise, and ensure that the advisers continue to adhere to the plans in the future.
If done correctly, asset protection planning can provide important financial protection and improve personal and business decision making. If done incorrectly, or with the wrong motives, it can compound the misery it seeks to avoid.