Tag Archives: Asset protection

Asset Protection, Estate Planning

Don’t Overlook the Importance of Life Insurance

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When it comes to creating an estate plan, you want to be as comprehensive as possible. Many people may not consider life insurance as part of their estate plan, but it is an important component in protecting your loved ones. In fact, if you have young children or a loved one with a disability, obtaining life insurance can be an effective way to ensure that they are provided for after you die. It allows your loved ones to obtain immediate cash at a critical time.

Determining the amount of life insurance you need may not be simple. You must consider both your long-term and short-term goals, as well as the needs of your family members who have been dependent on your income.

When you have minor children, you must consider how long it will take before they will be financially independent. If you have older children that are employed, they may require less monetary support than the younger children.

As general guidance, you must calculate the long-term needs of your dependents. This includes figuring how much of your income is provided to them every year, subtract the value of the assets you will pass down to them as well as any monetary support they will receive from other family members. This gives you an estimate on what each dependent will need.

In considering the short-term needs of your dependents, consider whether they will require quick access to money or assets. If most of your property is not easy to access or able to be immediately liquidated, then proceeds from life insurance can provide money for your loved ones to live on while they convert assets to cash.

It is our goal to provide you with the most comprehensive estate plan and asset protection plan as possible. Let us review your individual circumstances and help you create the best strategy for you and your family.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

Asset Protection

Protecting Assets the Right Way

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If you are interested in asset protection tools, it is important to seek legal advice from an attorney. There are several options for correctly and legally protecting your assets, but there are also many ways you can get yourself into trouble if you do not do it properly.

One of the key steps in asset protection is timing. You can accomplish the most when you do not have any potential liabilities. In other words, if you have known creditors and you take action to protect your assets, your activity could be seen as a fraudulent transfer or conveyance.

A fraudulent conveyance occurs when an individual attempts to transfer assets outside of the reach of a creditor. A common example occurs when an individual transfers a valuable piece of property to a relative so it is no longer owned by that person and the property is outside the reach of transferor’s creditors.

A common misunderstanding is that a transfer cannot be fraudulent if the asset is “sold” to a third-party. However, if you transfer the property for less than its full value, it can still be deemed to be an improper transfer. For example, if you sell a piece of artwork for $100 when it is valued to be worth $6,000, creditors that are harmed by this action could argue that the sale was a fraudulent transfer. It’s also important to know that you don’t have to commit fraud to have a “fraudulent transfer”. For example, it’s not unusual for spouses to transfer assets between themselves for estate planning purposes. But a transfer for less than full value can still be a fraudulent conveyance from a creditors viewpoint.

It is important to understand that there are numerous ways we can help you protect your assets. A few examples include creating a:

  • Trusts
  • Limited Liability Company
  • Family Limited Liability Company
  • Limited Partnership
  • Corporation
  • Offshore Trusts
  • Other forms of ownership entities for your assets

If you are interested in learning if now is the ideal time for you to take asset protection measures, contact our office to schedule your appointment.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

Asset Protection

Asset Protection with Generation-Skipping Trusts

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Couple giving two young children piggyback rides smilingIf you have worked hard all your life to accumulate your wealth, whether it is a small amount or a significant amount, it is important to protect your assets. Estate planning is a critical element of asset protection efforts. In order for estate planning to be effective, you should try to identify all of the potential “threats” to your assets. Common examples include taxes, the expenses associated with probate actions, former spouses, and creditors.

There are numerous ways we can help you avoid certain threats that could negatively impact or deplete your assets. One option to consider is placing your assets into a generation-skipping trust. As indicated by the name, you skip a generation when naming beneficiaries. In other words, you name your grandchildren as the final beneficiaries instead of your children. This may sound shocking, but there is a twist to this arrangement. Your children can be life beneficiaries, with the Trustee having the discretion to distribute income or principal of the trust to your children during their lifetime.

As a result, because your children do not own or have the right to assets in the trust, the assets are not available to attack by their creditors. The remaining trust assets left after your children die are transferred to your grandchildren. In sum, a generation-skipping trust impacts ownership, not the benefits received or the ability to use trust assets.

The generation skipping type of trust benefits your children and grandchildren, but not necessarily you as the Grantor. If you are working to protect assets for your benefit, there are other strategies such as use of Family Limited Liability Companies (“FLLC”), or Domestic Asset Protection Trusts, or even more complicated arrangements using Off-Shore Trust arrangements.

Generation skipping trusts are just one example of how you can protect your assets. Let us review your individual circumstances and help you understand your options for asset protection and tax advantages for your family. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

 

Asset Protection

Asset Protection Through Family Limited Liability Companies

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11102865_s (2)A Family Limited Liability Company (FLLC) can be an effective tool for protecting your family’s assets from creditors. The FLLC can allow you to maximize your family’s net spendable income while also provide you with estate planning options.

What is a FLLC?

The FLLC is a form of business or investment entity ownership, which is generally created to provide its owners with significant protection from creditors and potentially substantial estate and gift tax savings. It usually involves several owners who are related to each other and it operates under a restrictive operating agreement that outlines the terms upon which the FLLC will do business.

How does a FLLC work?

The most common arrangement involves a senior member creating the FLLC and serving as the Managing Member. Children and grandchildren can be named as Members of the FLLC, but without any management authority. Typically, the senior member funds the FLLC with money, real property, stocks, bonds, artwork, or other assets. Percentages can be assigned to each Member (children or grandchildren) with discounts being allowed as to the valuation since they are receiving a minority interest (without any control authority over the FLLC). Each party’s contribution to the FLLC determines liability for debts. Additionally, the FLLC provides significant flexibility since ownership shares can be modified as your family or business changes.

What are the benefits of a FLLC?

A FLLC can allow you to shift or reduce income tax and estate tax liability among generations in the family. The FLLC is often treated as a partnership for income tax reporting, with flow-through taxation, which means the profits and losses of the entity are passed through pro rata to the members. Using a FLLC for estate planning purposes allows you to reduce the size of the senior member’s estate and contributions to the FLLC are not taxable events, while also providing asset protection from lawsuits against the individual members of the family.

By transferring ownership to multiple owners through the FLLC, creditors of any member are unable to force a dissolution of the business entity and their remedies are restricted to obtaining a “charging order” which provides only that the creditor receives distributions when the members receive distributions. Since nothing requires that a FLLC distribute profits, it is not very beneficial to the creditor. Thus, the FLLC provides a distinct benefit for asset protection purposes.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.