Asset protection shields wealth from all potential threats. According to the Asset Protection Society, these threats include the government, stock market, medical emergencies, scams, creditors, and many others. The answer to the question “what is asset protection?” therefore depends on the circumstances of each individual. Some may face heightened threats from capital gains taxes, while others may be particularly vulnerable to scams. An experienced asset protection lawyer in Arizona may be able to provide more detailed insights and personalized guidance. To discuss specific threats to various assets, call (480) 320-2310 – and consider a consultation with Harrison Law, PLLC.
Who Needs Asset Protection Strategies?
Almost anyone can benefit from asset protection strategies. Even those without substantial assets may implement these strategies ahead of time in a proactive manner. For example, an entrepreneur might have an innovative new idea for a startup. Preemptive asset protection strategies can help shield future company profits. It is never too early – or too late – to consider asset protection. That being said, asset protection may be particularly beneficial for a few select individuals:
Asset Protection for Seniors and Their Beneficiaries
Asset protection may be especially important for seniors and their beneficiaries. With only a rudimentary estate plan in place, seniors and their families could encounter numerous issues. In 2020, the Federal Bureau of Investigation warned of increasing senior scams in Arizona, stating that the majority of cybercrime victims are over the age of 60. These scams are becoming increasingly sophisticated. A senior who loses their hard-earned wealth in this manner may struggle with physical, mental, and financial burdens during their final years. The loss of a family fortune may also rob beneficiaries of their inheritance. Asset protection strategies can shield this vulnerable wealth – creating checks and balances against fraud. Retirees may also engage in asset protection strategies against creditors. These tactics may include homestead exemptions, which protect primary residences against creditors and forced sales.
Asset protection strategies can also shield wealth from beneficiaries. For example, a spendthrift or “drip-feed” trust can prevent financially irresponsible relatives from spending their inheritance within a few short weeks. These estate planning strategies may be especially helpful for beneficiaries with gambling addictions, substance abuse problems, or poor financial knowledge. Sometimes, the greatest threat to a fortune is a family member – not a creditor.
Asset Protection for Businesses Facing Lawsuits
Some businesses are more vulnerable to lawsuits than others. For example, a web design company operating entirely in the digital world is unlikely to face a premise liability lawsuit. However, a skydiving company is much more likely to face personal injury claims. An obvious first step is to choose an appropriate business entity. Corporate structures – including LLCs – shield the personal assets of business owners against lawsuits. On the other hand, partnerships share liability across many individuals, making lawsuits more manageable. Other relevant strategies include insurance, gifting, and trusts.
Asset Protection for Real Estate Investors
Real estate investors may also benefit from asset protection strategies. These investors are vulnerable to numerous threats, including property damage, tenants who refuse to leave, lawsuits, and volatile interest rates. Perhaps the most obvious option is to create a corporation or a Limited Liability Company (LLC) for real estate investments. This provides a layer of protection between personal assets and real estate investments. After establishing companies, landlords may shield their personal assets against lawsuits from tenants.
Another obvious asset protection strategy for real estate investors is a comprehensive insurance plan, which can reduce costs related to both property damage and lawsuits. Insurance for loss of rental income is also possible, and this may prove helpful when evicted tenants refuse to leave. Increasing debt and reducing equity is another way to shield real estate investment assets against a range of threats, including lawsuits. An asset protection lawyer at Harrison Law, PLLC may be able to help investors reduce capital gains taxes when selling real estate properties.
What Can Asset Protection Shield Me From?
Asset protection can shield wealth against numerous potential threats. What is asset protection best for in this regard?
Asset Protection Against Government Entities
Various government entities may attempt to access assets. The most obvious threat is taxation from the Internal Revenue Agency (IRS). There are numerous taxes to consider, including capital gains, estate taxes, income taxes, and property taxes. The IRS also forces businesses to collect sales taxes in many situations.
These taxes may be federal or state, and parties may limit them with various estate planning or asset protection strategies. Aside from the IRS, various government agencies may sue businesses and individuals directly. Businesses frequently face lawsuits from the Equal Employment Opportunity Commission (EEOC) and the Environmental Protection Agency (EPA). Businesses may also owe various duties and tariffs when engaging in international or interstate trade.
Asset Protection Against Creditors
Protection against creditors can help people keep their homes, access medical treatment (including Medicaid), and take full advantage of investment opportunities. Although creditors often claim to have the right to access certain assets, various legal strategies may prohibit them from doing so.
Protection Against Plaintiffs
Finally, asset protection strategies can protect against average people filing lawsuits. Even something as simple as a car accident can cause considerable losses if plaintiffs can pursue the personal assets of a high-net-worth defendant. These threats are particularly high for certain businesses. Proper corporate structuring and insurance policies can help protect high-income individuals against threats from lawsuits.
Contact the Experienced Arizona Asset Protection Attorneys at Harrison Law, PLLC
Harrison Law, PLLC has experience with estate planning, trusts, asset protection, and many other related areas. While the law firm is located in Arizona, it also serves individuals and businesses across the nation – and the globe. Asset protection strategies may seem daunting, but they can provide peace of mind once implemented. With help from Arizona asset protection lawyers, asset protection strategies may also be easier to put in place than many realize. To discuss specific goals and priorities, consider a consultation with Harrison Law, PLLC. During this first meeting, investors can ask various questions – including “what is asset protection?” Call (480) 320-2310 to discuss the next steps.
© 2024 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
