Asset Protection

Marina JacksAsset Protection – Our assets are always at risk. Whether it’s through unknown creditors, accident, divorce, or acts of God; there will always be risks. However, this risk can be minimized through proper planning. On this page you’ll find various strategies to limit an individual or couple’s exposure to creditors.

Homestead – Homestead property is only subject to the claims of a very select class of creditors. This is usually limited to contractors, mortgagors, and taxing authorities. Ordinary and unsecured creditors can not attach homestead property. Therefore, homestead property is one of the most secure properties we own.

Joint Ownership with a Spouse – Joint assets of a married couple are not subject to creditors’ claims against one spouse. Therefore, the debt of one spouse can not attach to property owned jointly by both spouses.

Titling – Automobiles are one of the most dangerous items we own. When an accident occurs, an injured party may sue both the operator and the owner. If one spouse drives the car and the other owns it, an injured driver may be able to pursue the couples joint assets. Therefore, vehicles should be titled in the name of the primary driver.

Compartmentalization – This is a strategy that may be equated with a submarine. A submarine is divided by bulkheads so that if any one compartment floods, the entire submarine is not lost. This same approach may be used by placing significant assets like investment real estate into separate limited liability entities. Therefore, creditors of one property will have no legal right to other assets. Limited Liability Companies are an excellent vehicle for this type of Asset Protection.

Posted in Estate Planning.