Asset Protection Planning
“Start early, keep it simple, and don’t try to hide stuff from your creditors.” Jay Adkisson, Asset Protection Attorney
“Asset Protection planning is like Insurance. It’s better to have it and not need it, than to need it and not have it.” Unknown
As a rule, the time to plan, design and implement asset protection planning is now, before creditor claims arise.Generally, it is too late to put an asset protection plan into place after an event, like an accident you have caused, has occurred. After a creditor claim arises, there are a few strategies that can still be employed, but most techniques will be rendered unavailable by law. Usually, planning is only effective for future creditors that may arise.
In appropriate circumstances, we provide Asset Protection Consulting and Planning Using and analyzing the following:
- Limited Liability Companies
- California Trusts
- California Private Retirement Plans
- Private Trust Companies
- Delaware Trusts
- Offshore Havens
- Offshore Asset Protection Trusts
- Equity Stripping
- Fraudulent Transfers
- Asset Protection for Physicians and High Risk Business Owners
- Marital Agreements
- Employee Handbooks
- Poison Pill Agreements
- Qualified Retirement Plans
- Captive Insurance Companies
- Insurance Policies and Alternatives
If you are a business, you need to get properly insured.
Most businesses have the required types of liability insurance such as workers’ compensation, and auto, and obvious insurance needs, such as property and casualty, health, etc, but often overlook basic coverage such as general liability insurance. And, remember, insurance policies have policy limits. If a creditor obtains a judgement against you in excess of the policy limits (including the attorney’s fees that are part of the policy limits), you or your business are personally liable.
Professionals such as Physicians, Lawyers, Attorneys, Dentists, CPAs, Architects, and others should unquestionably obtain professional liability insurance.
It is recommended that you carry sufficient personal liability insurance in the event your business entity (corporation, LLC, etc) is pierced by a creditor by order of the court, or if you are the personal cause of a personal injury, in which case your entity gives no protection at all. Consult your agent for this type of coverage.
It is also suggested that every business owner carry a personal “umbrella” policy. It’s usually easy to obtain through your homeowner’s carrier and is affordable.
But, realize that insurance will not cover certain claims. A common claim is employee related, such as employment discrimination or sexual harassment. Unless you purchase costly ‘Employment Practices Liability’ for these specific claims, you have exposure to potentially huge claims and judgments. And, even if you do, some claims, such as wage and hour violations, are not covered by EPL insurance. Therefore, every business should have a well written, strong, up to date, Employee Policy Handbook, coupled with proper training of supervisors, to minimize the risk of viable claims.
Further, insurance does not give protection against contract breaches. Nor does insurance give protection against the IRS and California Tax agency powers to find owners and officers personally liable for tax debt.
Finally, insurance companies sometimes go out of business, in which case your policy becomes worthless.
As a result, Asset Protection Planning should be a prime objective of every business owner, Professional person and person of wealth.