Asset Protection Strategies
Serving Massachusetts clients with Asset Protection Strategies
Asset Protection involves a combination of carefully planned legal techniques that create barriers between your wealth and potential threats. The general objective is to minimize the risk of potential liability and preserve your assets. A well-crafted Asset Protection strategy, is not a one size fits all, and is based on a comprehensive review of one’s financial resources, assets and concerns.
The techniques you employ will be highly dependent on your objectives, which can include estate tax reduction techniques, Domestic Asset Protection Trusts (DAPT), QTIP Trusts, Spendthrift Trusts, Irrevocable Life Insurance Trusts (ILIT), Offshore Asset Protection Trusts (OAPT) and Medicaid trusts.
In addition to Trusts, some techniques designed to help protect assets include:
- Utilizing Liability and Life Insurance
- Filing a Declaration of Homestead, to protect a limited amount of equity in your primary residence from certain creditors and bankruptcy proceedings
- Making outright gifts to family members or loved ones
- Maintaining a significant portion of your assets in your Qualified Plan—i.e. 401(k), Profit Sharing Plan—which is exempt from bankruptcy proceedings
- Maintaining a significant portion of your assets in your IRA—up to $1,000,000—which is exempt from a bankruptcy proceeding pursuant to Massachusetts laws
- Both spouses titling property ownership in Tenancy By the Entirety, to protect the equity in the property from creditors of only one spouse
- Transferring or assigning business assets to legal entities such corporations, limited liability companies and family limited partnerships
Asset Protection and Elder Law
Asset protection also deals with protecting your family assets from the exorbitant costs of long-term care. Strategies to protect family assets may include spending down only certain non-exempt assets, deeding property to a Life Estate, the use of Revocable Medicaid trusts, and various types of commercial and private annuities.