Asset Protection Lawyer San Diego

ASSET PROTECTION LAWYER San Diego

ASSET PROTECTION

Asset protection is a constituent of financial planning intended to protect a person’s or business’s assets from third-party claims, such as creditor claims. In other words, asset protection aims to protect assets that third parties such as creditors could otherwise seize. Indeed, no asset protection plan can guarantee 100% impenetrability, but having an asset protection plan in place is an excellent lawsuit deterrent.

At Bagla Law Firm, is your premier San Diego asset protection lawyer providing individuals and businesses with legal counsel on asset protection based on a thorough understanding of California and federal laws.

The Best Time to Act

If you do not want to lose your assets to third parties in the future, the best time to act is NOW. Asset protection planning is something that should be done before a lawsuit arises. Indeed, it is possible for you to protect your assets after a lawsuit is filed, but it is best to protect your assets beforehand. If you wait until you are in the middle of a lawsuit to act, you might experience difficulties blocking third parties from accessing your assets.

Enlist the help of a qualified asset protection lawyer San Diego at Bagla Law Firm and get started on your asset protection plan.

Asset Protection Strategies

Asset protection strategies are legal methods used to shield personal and business wealth from lawsuits, creditors, and unforeseen financial risks. The strongest strategies are available before any claim exits, but the door, albeit more difficult and extra expensive, does not close when a lawsuit is filed. Some key strategies include utilizing offshore asset protection trusts, forming limited liability companies to separate business liabilities with charging order protection, equity stripping, irrevocable trusts with spendthrift clauses, exemption planning, obtaining insurance and umbrella policies.

An experienced asset protection lawyer can help you determine the strategy that will work for you. Generally, a good asset protection plan is a combination of financial and investment instruments that an asset protection lawyer designs for a client depending on their unique situation. A strategy that works for one client might not work for another. Different types of assets can also be approached a variety of ways. That’s why it’s important that you consult with an asset protection lawyer to determine the best course of action for your circumstances.

Offshore Asset Protection Trust

An offshore trust is the strongest form of asset protection available to U.S. residents. It moves assets to a foreign trustee governed by a country’s laws that are built to block U.S. creditor judgments. The Cook Islands is the most established jurisdiction. A U.S. judgment has no legal force there. A creditor who wants the trust assets must start over, such as hire local attorneys, refile the lawsuit under Cook Islands law, and file a minimum of $100,000 bond with the Cook Islands authorities. The Cook Islands trust laws have been tested in contested proceedings for over 45 years.

Limited Liability Companies and Charging Order Protection

A properly structured limited liability company limits a creditor to a charging order, a lien on distributions that does not give the creditor control over the limited liability company, access to its assets, or the ability to force a payout.

Equity Stripping

Equity stripping is an asset protection strategy that involves reducing a property’s equity to make it less appealing to creditors. It works by placing liens or loans, such as a second mortgage or home equity line of credit, on an asset, creating high debt and low net value. The primary goal is to make a property or business appear “judgement proof” meaning it has no equity for a creditor to seize, thereby deterring lawsuits

Irrevocable Trusts with Spendthrift Clauses

An irrevocable trust created by one person for the benefit of another provides creditor protection for the beneficiary if the trust includes a spendthrift clause. A spendthrift clause in a trust prevents a beneficiary from mismanaging their inheritance and protects trust assets from their creditors. The beneficiary’s creditors generally cannot reach the trust assets before distribution because the beneficiary never owned them and cannot compel a payout. It restricts the beneficiary from voluntarily transferring, selling or assigning, their future interest and blocks creditors from seizing assets while they remain in the trust. Spendthrift clauses are common in estate planning, whereby a parent creates a trust for an adult child, protecting those assets from the child’s future creditors, divorce claims, and lawsuits. Most states enforce these provisions.

Exemption Planning

State and federal law automatically shield certain categories of assets from creditors. The protections are statutory rights, though structuring assets to quality often involves professional guidance.

Homestead exemptions protect equity in a primary residence. The strongest states include Florida and Texas, who have no dollar cap. Other states limit protection to as little as $5,000.
Federal law shields retirement accounts covered by ERISA, including 401(k)s, pensions, and profit sharing plans from creditors. IRA protection depends entirely on state law and ranges from full protection to none.
Tenancy by the entirety protects jointly held marital assets from the individual creditors of either spouse in states that recognize it.

Insurance and Umbrella Policies

Liability insurance is where asset protect starts. Auto, homeowners, and professional liability coverage handle most routine claims. An umbrella policy extends coverage beyond the limits of underlying policies, usually in $1,000,000 increments. Insurance is necessary but limited. Every policy has a dollar cap, a list of exclusions, and the possibility the carrier denies the claim. An umbrella policy excludes intentional acts, business disputes, and professional liability. Eventually insurance runs out or they refuse to pay.

Domestic Asset Protection Trust

A domestic asset protection trust is another tool that can help with asset protection. Giving up some control over your assets can help you stay in control of them. With a trust, you have a wall of protection around your assets. The trust owns your assets, and so if a third-party lawsuit arises, the assets in the trust are beyond their reach. There are different types of trusts and it’s important that you choose the right one in order to actually protect your property. An asset protection lawyer San Diego can explain the complexities of the trust and ensure you set it up properly to get the most protection for your assets.

Talk to San Diego Asset Protection Lawyer, Kelly Bagla

Having a qualified asset protection lawyer guide you through asset protection is crucial as there is no “one size fits all” asset protection plan. The skilled and dedicated asset protection lawyer San Diego at Bagla Law Firm can help you determine which asset protection strategy is best for you. Contact us to learn more about how we can help with asset protection.

Kelly Bagla, Esq.

High Net-Worth Business Attorney, Kelly Bagla is an international award-winning corporate lawyer and entrepreneur. Affectionately known by her clients as, “Queen of Business Law®,” Kelly protects high net-worth individuals and business owners through custom legal strategies.

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