Estate Planning Law

How Can You Protect Your Assets from Future Creditors?

As we age, protecting our assets is one of the things that many of us worry about most. From our real estate holdings such as our primary residence and investment properties, to cash, stocks, and bonds; there are many sources of income both liquid and illiquid that can be attacked by creditors in order to satisfy any judgments or outstanding liens. 

In planning for your estate and your nearer term future, you should be aware of Florida’s asset protection laws and schemes that can help you ensure that creditors don’t get the bulk of what you have worked so hard to build. Contact Palm Beach, Florida attorneys at Doane & Doane today to help ensure that your rights are protected. We are experienced estate planning attorneys who are more than happy to assist you in planning for your financial future. We can be reached at 561-656-0200.

What Falls Under the Definition of “Assets?”

Assets are generally defined as anything of value that produces income. For example, your primary residence is an asset. Your priceless designer furniture is an asset. The paid-off antique automobiles in the driveway or a collection of rare jewels are assets. Your 401k and any stocks, bonds, or other investments can be considered assets as well.

Why Do I Need To Work With An Attorney To Protect My Assets?

Working with a Palm Beach, Florida attorney to protect your assets can help safeguard your estate for future generations. In a litigious society like the one we currently live in, anything can happen.  So, ensuring there are legal firewalls between you and any adverse judgments can mean the difference between you continuing to live a comfortable life and financial ruin.

We have all seen the impact what some would call a “frivolous” lawsuit can have on the fortunes of a person or business. One slip and fall at your business or home can have the aggrieved party rushing to a plaintiff’s lawyer for a quick payday. While you may be able to beat back any sort of settlement or finding of guilt at trial, a lawsuit still leaves you drained financially between attorney’s fees and lost time from focusing on income-producing activities. Worse still, you must agree to a settlement or the court rules against you and orders you to pay an exorbitant amount of money. 

What Assets May Be Out of Reach From Creditors?

There are a variety of strategies to shield assets from creditors. However, some assets will not be able to be shielded and will be used to pay any settlement, judgment, or tax lien that exists.

For example, in Florida, checking and savings accounts in addition to CDs in your name will not be shielded. Similarly, real estate which is not your personal residence and mutual funds or stock trading accounts are subject to judgments. Finally, any business interest in a sole proprietorship and any personal property will be able to be attached to a judgment and used for collection purposes. Any of the assets mentioned are not subject to legal protections.

However, working with an experienced Palm Beach, Florida attorney, you can work to protect assets in Florida such as your homestead, annuities and life insurance, qualified retirement accounts, business entities, and other qualified arrangements.

1. Protecting Your Homestead: In Florida, your personal residence is safe from a forced sale to pay off a judgment or settlement against you. Thus, that is the easiest way to protect your assets from state actions or federal bankruptcy actions. However, this may be placed into jeopardy if you default on your home mortgage. Other notable exceptions are an IRS tax lien or an adverse action as a result of a divorce from your spouse.

2. Safeguarding Annuities and Life Insurance Policies: Life insurance and annuities are both financial instruments that many use to guarantee an income or to guarantee a payout for their heirs. In Florida, both annuities and life insurance policies are protected if the benefit is for another person. Thus children, grandchildren, nieces, and nephews will not be robbed of all or part of their inheritance due to an adverse judgment against you.

3. Allowing Protection for Retirement Accounts: In Florida, retirement accounts such as IRAs, Roth IRAs, and similar accounts also qualify for protections. These 401k and IRA accounts are generally used for retirement purposes and thus are not usually subject to attachment as they can be taxed by the IRS later when they begin to pay out. 

4. Qualified LLC Business Entities in Florida: while many view Limited Liability Corporations (LLCs) only as a conduit for conducting business, they can also be used by individuals to hold assets. For example, an LLC consisting of family members can hold real property, such as investment homes or property, artwork, boats, vehicles, and other items of value exempting it from any court judgment against any individual. However, in Florida, a single-member LLC – that is, an LLC consisting of only one person – may be able to be attacked and used to pay off a judgement within a variety of circumstances.

Why Consult With a Palm Beach, Florida Attorney On My Asset Protection And Planning Strategy?

Navigating Florida law when it comes to asset protection is not only difficult, it is also time consuming and can backfire without the assistance of a qualified legal professional. Working with Palm Beach, Florida attorneys, you can help ensure that your assets are protected, your plan for the future is intact, and the hard work of your lifetime is able to transfer to the next generation. Planning for the future in Florida should be done with a qualified legal professional to ensure your rights are protected and, if the worst happens, your estate emerges relatively unscathed.

Call us at Doane & Doane, P.A., to help you if you are faced with an asset protection and planning matter, or if you own property or have accounts in Florida and wish to avoid the attachment of any of your assets to a judgment.  

We at Doane & Doane combine big firm resources and experience with the personal touch of a small, boutique firm.  We pride ourselves on offering the kind of one-on-one attention that clients at big firms often do not enjoy.

After almost two decades of practice, we have earned the reputation as one of West Palm Beach’s most prominent tax and estate planning law firms.  In particular, we understand that estate and probate matters involve a great deal of emotion. We are privileged to help clients on such important matters, and we genuinely care for and support our clients and their families.  Our friendly staff and atmosphere are vital to the quality client service we provide.  

We hope that all of our clients, friends, and business associates enjoy the hospitality of our firm’s legal staff. Doane & Doane serves clients in the communities along Florida’s Gold Coast and Treasure Coast, including Palm Beach, Broward, Miami-Dade, Indian River, St. Lucie, and Martin counties. For a free consultation and to get to know our firm, please give us a call at 561-656-0200.