What Are Some Misunderstandings and Misconceptions About Asset Protection?
Some things that don’t work, like the top mistakes that people make that just don’t work, Just give it all away, whether it’s a relative or to friends or something like that. It’s always important to have things in writing regardless if it’s to a friend or family member. That way, we know for sure this is what your intent was. “My intent was to give this as a gift to my loved one or to a family member” and all of that. We always want to make sure it’s properly documented. no matter what it is.
So another top mistake or what just doesn’t work is doing nothing at all and hoping for the best. I see this so many different times in my office, people just not talking about it. What ends up happening is either somebody gets sued or somebody passes away. Then they come to my office, and I have to fix it. It ends up costing them more time and more money on their end, to try to fix or try to correct what wasn’t done right to begin with, or somebody didn’t fill out the proper paper correctly. So in the office, we’re constantly fixing what the client hasn’t done.
What Are the Legal Limits of Asset Protection Planning?
Of course, as a general rule, there’s always an exception to the rule. There always is. But the main things than cannot be avoided is limitations on spousal and child support. In all the research that I’ve done through all my experience over the years, the two biggest things that cannot be avoided are spousal support and child support. Clients need to keep that in mind.
But if you have a business, there are ways to protect it. If you have a retirement account, there are ways to protect it. If you have a house, there are ways to protect all those things. But there are some legal limitations, depending on the type of creditor in question.
I think our clients are just generally aware that spousal support and child support, that can’t be avoided. That’s the “creditor” that cannot be avoided. That’s heavily documented in all the research that I have found over the years of my experience.
What is Fraudulent Transfer? What are Some Examples of Fraudulent Transfer?
My experience with the fraudulent transfer is, it’s usually not to a family member. Going back to earlier considerations, we look at the timing of the transfer and whether the proper documentation is done. What type of asset is it, who did it go to, why did it go to this person? Did you know that you were going to be sued, and that’s why you just gave away all of your stuff right before the case was filed? Or once the case was open, then you gave away all of your assets?
So we definitely look at who it went to and what it was sold for. If it’s an asset that’s worth a lot of money and you gave it away, or gave it for pennies on the dollar, that raises a lot of flags and a lot of questions.
I always ask, “Who’s it going to? How are you related to this person? How do you know this person?” We look at the timeframe of it and we make sure they have proper documentation in place to help avoid any instances of fraudulent transfer.
When Is The Best Time To Begin Your Asset Protection Planning?
The best time to plan is now. It is never too early and you can never be too young to start some type of asset protection plan. I see a lot of times where clients will wait until it’s just too late, and then our job at the office is to help fix that problem. Or if the loved one passed away, how do we get these assets transferred to the loved ones without creditors?
The sooner a client can start planning asset protection, the better. As time passes and people get older, sometimes people forget to do things. So the best time is now.
Should Multiple Asset Protection Planning Strategies Be Used?
Multiple strategies and techniques can be used in asset protection planning. It will depend upon what types of assets the clients have. What type of property is this? What type of asset is this? Different strategies can be used to protect different types of assets, so it’s an important conversation to have with the clients. What is your goal? Do you want to pass this to a loved one? Do you want to sell this, or get rid of this? And we develop a plan for them based on their specific needs and goals.
Does Asset Protection Planning Need to be Updated Over Time?
Yes. It’s always best to update your plans, even your estate plan, at least every other year. People change, their needs change, and laws are constantly changing over time. Life is always changing. We always suggest taking a look at your plans at least every other year.
For more information on Asset Protection Planning In Ohio, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (330) 222-3898 today.