Shielding Your Wealth From Creditors
While we all wish to grow our financial assets as much as possible, it is also important to protect these assets as much as possible. Creditors may attempt to obtain a lien upon such holdings. Others may also make a claim and try to obtain a judgment against your estate. Advance planning to protect such assets is therefore in order.
The attorneys at Livens & Reed, PLLC understand what steps to take to allow you to protect your earnings. Based in Bedford, we provide asset protection services in the Dallas-Fort Worth area and throughout Texas. When discussing your situation, we will provide for you proven strategies geared specifically toward your needs and circumstances.
Determining Whether Your Assets Are At Risk
Creditors do not have a right to make claims concerning all of your assets. For example, creditors cannot make claims upon your home, qualified retirement plans, annuities and life insurance proceeds. However, creditors may seek to gain access to your second homes, equipment, land, bank accounts, CDs, stocks and bonds, and other business interests.
Our asset protection lawyers can closely analyze your belongings, and determine what financial assets are at risk. We can also suggest steps to take to prevent heirs from losing the right to such assets due to litigation.
Use Of Family Limited Partnerships To Protect What Is Yours
A very effective tool we can use to help protect your assets is the creation of a family limited partnership (FLP) or limited liability company (LLC). Use of either method of protection can prove effective, but it is our belief that an FLP will prove more advantageous in the majority of cases.
By contributing assets to a Texas registered FLP and naming a third-party manager as a general partner, you reduce your exposure to liability to lawsuits by becoming a limited partner. Only the general partner faces liability exposure at that point. Creditors can only make a valid claim in the event you take cash distribution. The creditors cannot force you to take such cash distributions, however. This is true even should there be a charging order from a judge.
In an FLP, there is also discounting of shares for tax purposes after you die if you are a limited partner. This is because you have no right to income or transfer, and you have no liquidation rights.
Asset protection requires great care, however. A judgment or perfected lien can make it impossible for you to legally transfer assets. There may also still be federal and state tax obligations to consider.
Call Livens & Reed, PLLC at 800-569-2663 or reach us online. In a free initial consultation with an experienced lawyer, we will explain our successful asset protection strategies in clear terms that relate to your specific circumstances.