What are Asset Protection Strategies?
As Florida asset protection lawyers, we have assisted hundreds of clients, from medical doctors to business owners to real estate developers, protect their assets from judgment creditors and lawsuits. We understand that wealth accumulated over a lifetime can be quickly and irrevocably lost in lawsuits filed by creditors and the debt collection laws they use to attack clients’ assets.
Fortunately, at Kramer, Green, Zuckerman, Green, & Buchsbaum, P.A.,we also know how to maximize Florida’s exemption laws to protect your assets from creditors to the greatest degree possible. We also have critical knowledge of state and federal bankruptcy, estate planning, and tax law, all of which are relevant to asset protection techniques and your legal rights to protect your assets from creditors.
We know how hard you have worked to build your successful business and amass assets for you and your family. One complaint should not result in losing everything you have achieved in your professional life. Contact an asset protection lawyer in Florida today to learn what we can do to help prevent this situation from happening to you. Call the offices of Kramer Green at (954) 884-8373 or reach out to us online.
Why Do I Need a Florida Asset Protection Lawyer?
Litigation is common in all aspects of life, and everyone should be aware of the risks to their personal assets that various types of litigation can create. If a person or company sues you, they may become your creditor. In other words, you may owe a debt to them. A creditor then can attempt to make claims against your assets to satisfy that debt. These debts might arise from:
- Motor vehicle or other types of accidents
- Business litigation, such as professional malpractice, sexual harassment, or employment discrimination claims
- Uninsured medical expenses following a serious accident
- Defaulted loans following a failed business venture
Fortunately, you can take steps to prevent creditors from being able to reach your assets to pay these debts. By working with an asset protection lawyer in Florida to create a comprehensive plan, you can safeguard the assets that you have worked so hard to earn and maintain.
How an Asset Protection Attorney in Florida Creates an Asset Protection Plan
A Florida asset protection attorney will start by evaluating your assets, your debts, and your overall situation to create a personalized asset protection plan that maximizes your legal rights to protect your assets under state and federal law. Generally, asset protection is the process of arranging the legal ownership of your assets to protect them from the reach of creditors.
Inventorying Your Assets
The first step is to inventory all your assets, their values, and their current legal ownership and titles. The title of an asset is typically the name(s) that appear on the records or documents that act as proof that the asset exists, so providing those documents is a good way to establish whose name is listed as owner. Be sure to include all assets, such as real estate, personal property, bank and investment accounts, business interests, equipment, life insurance policies, annuities, wages or salaries, and anything of value.
Understanding Your Family Structure
Next, your Florida asset protection lawyer must be aware of your family structure and situation, including your marital status and dependents. Marital and child support obligations have priority over other debts, so they may restrict the ability of creditors to reach specific assets. Likewise, an existing prenuptial agreement may inhibit some asset protection techniques, such as those that might be available through estate planning.
Applying Exemptions: Exempt Assets
The first line of defense is exemption planning. Florida has among the most generous exemption laws in the country. We try to make use of the Florida exemption statute to the extent that it makes economic sense. Most creditors who sue you and get judgments against you, or judgment creditors, cannot reach any of your exempt assets or take them to pay your debts.
Florida law exempts the following assets:
- The cash value of life insurance policies
- Annuities
- Individual retirement accounts
- Pension and profit-sharing plans
- Wages paid to a head of household
- Disability benefits without limit
Florida also exempts the homestead, or the primary residence, without any dollar limitations. The only limitation applies to the size of the lot. The exemption is limited to ½ acre within a municipality and 160 acres outside a municipality.
Implementing Asset Protection
You might wonder how to handle your other assets that are not exempt under state law. For example, you may own:
- Stocks
- Bonds
- Certificates of deposit
- Real estate other than your homestead
These assets, as well as some other types of assets, are not exempt assets under state law. As a result, a judgment creditor can “step into the shoes” of a judgment debtor, or the person who owes the creditor money, and seize their bank accounts, stocks, bonds, and other assets.
Therefore, when it comes to non-exempt assets, a Florida asset protection lawyer will present you with different asset protection tools to improve your situation with creditors. These tools differ as to their complexity, effectiveness, and cost. Ultimately, with our counsel and guidance, you can make an informed decision as to what tools are best for you and your situation.
For example, we often put non-exempt assets in a family limited liability company or family limited partnership. Other limited liability company owners or limited partners could be the spouse and children, either directly or in trust.
Similar issues exist as to an interest in a limited partnership and an interest in a limited liability company. However, with respect to these assets, the judgment creditor’s rights are limited to a “charging order.” Essentially, the creditor only has the right to intercept distributions from the entity, if any, that the judgment debtor would otherwise receive. We can often draft the entity agreements in such a way as to prevent distributions unless all partners or members consent. Without such consent, there can be no distribution and no payment to the judgment creditor.
Organizational Planning
Another vital aspect of asset protection planning is organizational planning. The biggest concern with organization planning is “inside liability” and “outside liability.”
Inside liability refers to entity liability. Under agency theory, the employer is liable for the acts of his employees in the course and scope of their employment. Under this theory, if the employee is liable, the entity is liable. For instance, if a doctor commits malpractice, the doctor’s employer also is liable. The choice of entity is unimportant; liability is liability.
What is more important is what assets the entity owns. If the entity owns no assets, there are no assets from which to pay the judgment. We have legal techniques to avoid liability in this manner.
On the other hand, outside liability refers to the individual’s ownership interest in an entity. In a lawsuit unrelated to the entity, the individual can lose that ownership interest to the creditor. Any organizational planning needs to consider this factor, as well.
A Florida asset protection lawyer also must consider who controls your assets. Many professionals, businesspersons, and others are understandably reluctant to give up control to others for asset protection. However, there are ways to handle this issue to your satisfaction, as well.
Work with a Florida Asset Protection Lawyer Today
The biggest issue we face is ensuring that our clients complete their asset protection and planning in advance. It is a much easier process for an asset protection lawyer in Florida to help them consummate their planning before an adverse event, such as malpractice, occurs. However, after an adverse event occurs, the opportunities available to protect your assets are far more limited. In such a case, the laws of fraudulent conveyances and asset conversions can unwind your asset protection plans and cause you catastrophic losses.
Contact our offices today by calling (954) 884-8373 or filling out our contact form online. Schedule a time to meet with a Florida asset protection lawyer and talk to us about your overall asset protection needs. Together, we can develop a strategy that is best designed to protect your assets should a lawsuit occur in the future.