You’re beginning to accumulate substantial wealth, but you worry about protecting it from future potential creditors. Whether your concern is for your personal assets or your business, various tools exist to keep your property safe from tax collectors, accident victims, health-care providers, credit card issuers, business creditors, and creditors of others.
To insulate your property from such claims, you’ll have to evaluate each tool in terms of your own situation. You may decide that insurance and a Declaration of Homestead may be sufficient protection for your home because your exposure to a claim is low. For high exposure, you may want to create a business entity or an offshore trust to shield your assets. Remember, no asset protection tool is guaranteed to work, and you may have to adjust your asset protection strategies as your situation or the laws change.
Liability insurance is your first and best line of defense.
A Declaration of Homestead protects the family residence.
Dividing assets between spouses can limit exposure to potential liability.
Business entities can provide two types of protection — shielding your personal assets from your business creditors and shielding business assets from your personal creditors.
Certain trusts can preserve trust assets from claims.
A word about fraudulent transfers The court will ignore transfers to an asset protection trust if:
A creditor’s claim arose before you made the transfer
You made the transfer with the intent to defraud a creditor
You incurred debts without a reasonable expectation of paying them
To read this full article in our Spring 2022 edition of Atomic Health News, click here.
This article was prepared by Broadridge Investor Communications Solutions for use by Idaho Falls financial advisor John Nolan of the Western Rivers Financial Group of Thrivent. He has offices at 2539 Channing Way, Ste 300 in Idaho Falls, ID and can also be reached at 208-522-6533.