If you have been advised to protect your assets, it is important for you to understand exactly what this means. Asset protection is the process of preventing your personal or professional assets from being accessed and seized by creditors. Your assets include your bank accounts, your real estate, and your investments. Asset protection can help those with significant resources, as well as members of the working class. There are various methods for protecting one’s assets, so those who think they are at risk should determine which method will best work for them. Those considering asset protection should contact qualified law professionals like The Port Law Firm in Florida.
When determining the best way for you to legally protect your assets, it is important to understand the overall worth of what you own. Typical middle class families will use different protection methods than those who have millions of dollars to protect. The same is true for those who own businesses. Working- and middle-class individuals who are concerned about losing their homes, vehicles, or savings can transfer these items into the name of a trusted friend or relative. This method, not usually advisable, is considered a “fast and dirty” method of protection and is sometimes used in unscrupulous ways.
For instance, if a person owes his former spouse alimony payments and he receives a settlement from a car accident, he will put this money into the account of a sibling or friend. This way, the ex-spouse and his lawyers are unable to access the settlement money for payment. In other cases, a family may be faced with medical bills they are unable to afford so they transfer assets to their adult children or their siblings.
If an individual is in a higher income bracket or is a business owner, he needs a more sophisticated means of protecting his assets. There are two choices which include domestic asset protection and offshore asset protection. Domestic asset protection includes setting up your business as a corporation. This allows you to separate business liabilities from personal assets. If something should happen and you are sued, the courts can only take business assets, not your home or personal savings and investments. When the lawsuit is filed, the plaintiff’s attorney will perform an asset search. Attorneys check tax records to determine what you own and each of these assets may be subject to court control.
Those who are looking for an even more sophisticated method of protecting their assets can choose to establish an offshore corporation. In doing this, you form a separate entity outside of the United States which essentially holds your assets and you are the only person who knows who actually owns them. You select a business representative who is the owner, but you retain control of business decisions and profits. Some people believe offshore asset protection is illegal. However, according to Ed Port of the firm, when the offshore option is mentioned as an asset protection tool, many people believe its purpose is to hide assets or avoid paying taxes. This cannot be further from the truth as while there is no doubt that people have tried to hide assets and avoid paying taxes, people can do that without going offshore. All offshore activity is documented and the IRS has procedures for reporting. When the right situation is present, the most effective asset protection plan will encompass both domestic and offshore options.
Qualifying for Medicaid
Another reason asset protection has become a popular legal issue is because it is used to help individuals qualify for government-funded Medicaid health insurance. In order to qualify for Medicaid, personal bank accounts need to show less than $2,000. Some individuals will transfer money to a family member so they qualify for this government-sponsored program, even though they still have access to their money.
If you believe you can benefit from asset protection, contact a reputable law firm specializing in the matter like The Port Law Firm in Florida. Port says that the biggest problem in protecting assets is that many people do not know that they can take action to protect their assets. Only after a creditor files a lawsuit, receives a judgment and takes a person’s assets, do people seek protection.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
