Asset Protection in Illinois and New York
Wills, trusts, and estates is a complex branch of property law, but understanding the fundamental aspects of this field is essential to protecting your assets. You may be a business owner or a professional, but you can still be subject to lengthy civil lawsuits that can threaten your wealth. Asset protection can help you avoid the costs of litigation, but you cannot wait until you have been named as a defendant in a civil lawsuit.
Specific types of business organizations are essential to a comprehensive asset protection plan. Limited partnerships, limited liability companies, totten trusts, and revocable trusts may all be relevant to different kinds of asset protection plans. An estate planning attorney can help you understand how asset protection plans are structured.
Estate Planning and Asset Protection
Asset protection is typically a component of an estate plan. Potential liabilities and risks need to be assessed so your asset protection plan is as effective as possible. For example, if you are an architect or a doctor, the business organization’s entities and your personal entities may be at risk. Your business may be named as a defendant in a civil lawsuit, and this can place the organization’s assets in jeopardy.
Professional malpractice and professional negligence can be an important factor when you are attempting to create an asset protection plan. Doctors and lawyers are often particularly vulnerable to facing civil lawsuits for professional malpractice. Assessing these risk factors is critical to formulating a strong asset protection plan.
Unfortunately, it is too late to put an asset protection plan in place after you or your business has been sued in a civil lawsuit. By planning ahead, and developing a clear understanding of your risks and liabilities, you can protect yourself and your loved ones from the risk of financial loss.
Asset Protection Tools
You do not want to lose your assets due to taxes, creditors, or civil litigation. Trusts are one of the best asset protection tools available. Trusts generally feature three parties: the settlor, the trustee, and the beneficiary. The settlor places assets in trust for a beneficiary, while the trustee manages and distributes the assets to the beneficiary.
Irrevocable trusts and revocable trusts are two of the most common kinds of trusts. By placing your assets in trusts you can avoid some creditors and reduce estate taxes. The majority of asset protection plans take advantage of both irrevocable trusts and revocable trusts.
Medicaid Asset Protection Trusts and Medicaid Family Protection Trusts are often used for clients who may suffer serious medical issues in the near future. These trusts ensure that the settler’s wishes are carried out even if they lose their cognitive capacity due to a medical diagnosis. When the client applies for Medicaid, the assets placed in the trust will not affect their eligibility.
Medicaid Family Protection Trusts protects trust beneficiaries and the trust corpus because courts and creditors may not reach the contents of the trust. Asset protection tools extend beyond trusts, and a skilled asset protection lawyer can help you understand the different categories of tools that can be used in asset protection plans.