How do you achieve asset protection? How do you best limit your liability and protect the assets and investments you have spent so much of your life building up? While you cannot completely eliminate exposure to potential liability, you can achieve asset protection through the use of simple techniques, like buying the right kind of insurance, or through the use of more sophisticated tools like asset protection trusts.
General Layers of Asset Protection Planning
- Purchase Protective Insurance. Examples: long-term care insurance, professional liability insurance, and umbrella personal liability coverage. Insurance is the simplest and most affordable way to protect your assets. When our clients ask us if we think they have enough insurance, we always tell them that you can never be over insured.
- Utilize Statutory Law Protections. Examples: ownership of real estate as tenants by the entireties, homestead exemptions, retirement plans, and life insurance or annuities. Real property owned by a husband and wife as tenants by the entirety is exempt from the separate creditors of each spouse. Additionally, other statutory protections provide that specific assets may be protected from creditors in certain circumstances. For example, in Tennessee, life insurance passing to a surviving spouse or child passes free of the claims of a decedent’s creditors. You should consult an attorney to find out which of your assets may be statutorily protected.
- Domestic Asset Protection Trusts. Tennessee is only one of a handful of states that has a specific statute allowing an individual to create a self-settled asset protection trust. This means that a person can create the trust, have control over certain aspects of the trust, and also be a beneficiary of a trust. The rules governing these types of trusts are very specific. These types of trusts are also available in Mississippi, Delaware, Alaska, and Nevada. If you are interested in learning more, click here.
- Domestic Entity Planning. Example: Wyoming Close LLC. An LLC, unlike a corporation, allows the members of the entity to separate their personal liability from their liability as members of the company. The most enticing feature of an LLC is the fact that a creditor of the LLC cannot attach the personal assets of the LLC’s members. We prefer using a Wyoming LLC because the laws in Wyoming are among the most favorable in terms of the protection an LLC provides.
Need an Asset Protection Attorney to Help Protect Your Assets?
By: Carlisle Dale
8001 Centerview Parkway, Suite 103
Memphis, Tennessee 38018
(901) 372-5003 Office
(901) 383-6599 Fax