Asset Protection Planning Tip: Divide Up Your Business Assets
Your goal when thinking about asset protection planning is to work with a professional to plan and discourage lawsuits and improve leverage in negotiations if a lawsuit is filed against you. This type of planning is the subset of estate planning and its objective is to place assets beyond the range of future Creditors Many doctors, landlords and other professionals and business owners in high-risk businesses are drawn to asset protection planning. In this article, I will discuss an effective asset protection strategy. I emphasize that asset protection is a proactive type of legal planning, and there is no legal way to make such transfers any time a lawsuit is pending, or threatened, or other events are occurring that would cause the transfer to be considered a “fraudulent transport”.
Also, this is not “tax evasion” in the sense that there are tax benefits to be derived from this type of planning.
Asset protection planning involves a great deal of confidentiality and trust between the person protecting your assets and the attorney and other service providers who help set up the plan. It is not a basic product that can be purchased online; rather, it is a highly personalized plan made for the client.
One of the goals of asset protection planning is to discourage lawsuits by lowering your financial profile. Many service providers advertise the need for domestic asset protection trusts, as well as foreign asset protection trusts, to achieve this goal. In this article, I will focus only on dividing your business assets as an asset protection tool.
If you are a high-risk real estate owner, doctor, or other business owner, the first thing you should do is take an inventory of your assets. Here are some strategies for dealing with specific assets:
1. Equipment: If you own valuable equipment, set up an LLC or other entity and lease the equipment to your operating entity, either business or professional practice.
2. Construction/Real Estate: If your business or professional practice owns a building, you transfer ownership to an entity and have your business or practice lease it to that entity, in a long-term lease on extremely favorable terms. Secure lease payments for the assets of your practice or business, and file a security interest lien with the public records.
3. accounts receivable: They belong to the company or to its professional practice, so they cannot be transferred to another entity. Strategies that you will want a professional to help you with include: a) factoring the accounts, b) pledging the accounts, c) using the accounts to finance life insurance, and d) securing the lease mentioned in paragraph 2 above. with accounts receivable.
The purpose of accounts receivable is to allow this asset to be seized by the practice in the event of a lawsuit. Again, all of this planning should be implemented as a proactive measure, and not when a lawsuit is threatened or pending.
Asset protection planning involves a great deal of confidentiality and trust between the person protecting your assets and the attorney and other service providers who help set up the plan. It is not a basic product that can be purchased online; rather, it is a highly personalized plan made for the client.
