Estate Planning May Include Strategies for Asset Protection, Says Estate Planning Attorney Andrew H. Hook
May 16, 2016
Hook Law Center (formerly Oast & Hook)
Virginia Beach, VA (Law Firm Newswire) May 16, 2016 – Estate planning clients often ask about the most effective methods of protecting assets from creditors. It is always best to transfer assets prior to the time at which any claims arise. It is too late to make any transfers after there is a creditor issue. If such a transfer is made, it will be considered a fraudulent transfer.
Other factors to consider are the following. If the grantor makes a gift to keep an asset from current creditors, but the grantor maintains control over the gift, then the gift may be deemed a fraudulent transfer. If the grantor makes a gift that causes the grantor to be insolvent, then the gift may be deemed a fraudulent transfer. In addition, a transfer to an asset protection trust that was created offshore or in the United States might be ineffectual if there is the possibility of a claim.
“Individuals need to be aware of the most efficient means of protecting their assets so that they are not subject to the claims of creditors. A consultation with legal counsel can help make certain that they employ strategies to protect their assets,” said Andrew H. Hook, a prominent Virginia estate planning attorney with Hook Law Center with offices in Virginia Beach and northern Suffolk.
One asset protection strategy is to form a business using a limited liability entity instead of a sole proprietorship. Among the choices of entity are a corporation, a limited partnership and a limited liability company. However, regardless of the kind of entity used, a limited liability entity will not offer liability protection if the corporate formalities are not followed. For instance, contracts should be in the name of the entity, there should be separate bank accounts for the entity, and personal funds and entity funds should not be commingled. Furthermore, there should be sufficient insurance coverage.
For individuals, the most effective asset protection strategy is to hold property jointly with a spouse. This kind of ownership is called tenancy by the entirety. Property held in this manner is usually protected against creditor claims of only one spouse.
However, there may be factors that would discourage couples from holding property jointly. For instance, in a divorce situation, jointly held property is considered marital property. In addition, the property may be incompatible with the estate-planning objective of having adequate property in each spouse’s name to fully use each spouse’s unified credit amounts. Due to the right of survivorship, the first spouse to die may be prevented from having any interest in the property left by will to another individual, such as a child from a previous marriage.
As a last resort, an individual can file for bankruptcy, in which case the debtor will be discharged from most debts.
Learn more at http://www.hooklawcenter.com/
Hook Law Center
295 Bendix Road, Suite 170
Virginia Beach, Virginia 23452-1294
Phone: 757-399-7506
Fax: 757-397-1267
SUFFOLK
5806 Harbour View Blvd.
Suite 203
Suffolk VA 23435
Phone: 757-399-7506
Fax: 757-397-1267
http://www.hooklawcenter.com/
- How and why seniors should stay socially engaged
Experts believe that in addition to engaging in regular exercise and eating well, social networking can contribute to the health of seniors. As you become advanced in age, changes that occur in the brain can make it challenging for you to absorb new information or recall things. In people who are afflicted with dementia, the […] - Learn the facts about passive index funds
When making investment decisions, people often consider whether they should use an active or passive strategy. Passive investing attempts to duplicate the returns of the market as a whole. This strategy does not involve the selection of securities by a portfolio manager. Without a portfolio manager to track the way an index performs, the cost […] - What you should know if you inherit your parent’s home
Many people will inherit the house in which their parents lived. Deciding what steps to take with respect to the house can cause you to confront some financial and emotional concerns, and matters can become even more complicated if you have siblings. You have the option to sell the house, move into the house or […] - How working after retirement affects Social Security
There are people who wish to work when they have reached their 60s, 70s and beyond, but are concerned that their income will adversely affect their Social Security benefits. However, there is no cause for concern because according to the Social Security Administration (SSA), you do not run the risk of losing any Social Security […] - You can insulate your retirement plan from government policy changes through tax diversification
While government policies can adversely affect your retirement, there are steps you can take to minimize the impact that they can have on your life savings. People are usually concerned about tax rates, which can directly affect your strategy for saving, and the amount of funds in your 401(k)s, IRAs and other accounts that are […]
