As you probably already know, we live in litigious society. Asset protection planning is a way to help avoid losing everything if you were to get sued and lose. If you are a doctor, lawyer or CPA you are especially exposed to this type of risk and would benefit substantially from asset protection planning.
Asset protection can also be put in place to make sure that the assets you worked so hard for aren’t wasted by your kids and grandkids when you pass. Through a trust you can specify that they only get a monthly amount, have to work until retirement before they get anything or anywhere in between. We can also keep the assets in the trust name so that if your heirs get divorced or sued, your assets would not be used to satisfy the divorce or lawsuit.
Is your family predisposed for a long term illness? By doing asset protection planning you can help ensure that your money doesn’t have to be completed depleted before you get any government assistance. Most people when they hear of Medicaid they think of the indigent. That is not what I am talking about here. Medicaid for long term care is actually part of the social security act and is something that you have paid into your whole working life. This is like buying an insurance policy and the company saying we will insure you, after you use all of your own money first. By doing correct asset protection planning ahead of time, you can qualify for that benefit you paid into and still have assets to use for better care or to leave as a legacy.
If you are veteran and served our wonderful country during a time of war you may also qualify for the VA Aid and Attendance benefit for long term care. Just like with Medicaid with proper asset protection planning you can take advantage of this benefit and preserve your assets for things other than basic care.
Another way asset protection can be done is through a Nevada Asset Protection Trust or NAPT. This is the most flexible of the irrevocable asset protection trusts and is sometimes referred to as a Domestic Asset Protection Trust, DAPT, Self-Settled Spendthrift Trust or SSST. The basics of this are that you can put assets in this trust (we recommend no more than 50%) and if you don’t get sued for 2 years, those assets are untouchable in future lawsuits. You can be one of the Trustees and then have at least one trustee who is a Nevada resident. The only restriction on the co-trustee is that they cannot be a spouse, but they could be a child or friend. It doesn’t have to be a company or independent third party. This Nevada Asset Protection Trust is one of the many reasons why Nevada is considered one of the best if not the best states for asset protection.
Outside of trusts, business entities can be a great way to protect your assets. If you have a business that you are running as a sole proprietor (no formal business entity set up) you are at great personal risk. LLCs, Series LLCs, Limited Partnerships, S-Corps and C-Corps are all great ways to limit your liability and provide asset protection to your other assets. These companies just need to have some sort of legitimate business operation and meet the minimum state standards to qualify. We will take care of all of the set-up process and annual maintenance on the company for you, so it doesn’t become a big headache and extra work.