Asset Protection

For many people, thinking about risks to your wealth is a paradigm shift. You come to Porzio with a specific issue in mind – “I need a Will;” “my parents are getting older;” “we want to reduce our taxes;” “we need a contract reviewed,” “I received a notice from the IRS;” or “my financial advisor says my trust isn’t performing.”  Our attorneys conduct a thorough interview not only to address the question you came in with, but to educate you about ways to avoid future problems.  The reason?  You aren’t just a project. You are a person with a problem, and we are your trusted advisors.  As trusted advisors, our role is not limited to the immediate problem, but extends to you, the person, and what problems might arise in the future. 

As a general rule, when you transfer wealth to another person (a gift or an inheritance) you can design the transfer so that any future creditors of the recipient will have limited or no access to the wealth you transferred.  These future creditors might include a spouse in a divorce, a bank in a failed business venture, obligations in the face of an economic downturn, or lawsuits against a successful family member.  It is much more challenging for you, or any person, to create asset protection with your own assets.  Who knows what the future may bring?  Why not make that future more secure for your family by leaving them assets in a way that people outside of your family can’t grab them, but your family members can use them for their benefit? 

The risks to your wealth are specific to you – your assets, family circumstances and lifestyle are unique.  Some issues to consider: 

• Aging parents – Who will be responsible for providing or managing care?
• Beneficiaries lacking financial maturity – How do you transfer wealth when you don’t know if or when the beneficiaries will have the skills to manage it?
• Business continuation – Are there plans in place, and authority granted, to allow your business to succeed without you?
• Creditors and predators – To whom might your beneficiaries owe money, and who might be influencing them in life?
• Divorce – Will a beneficiary share all of their assets with a spouse, and lose half in a divorce?
• Future lawsuits – Are your beneficiaries entrepreneurs or successful professionals who attract lawsuits due to their perceived “deep pockets"?
• Incompetence – Do your beneficiaries have the capacity to use their wealth for their own benefit?
• In-laws as “outlaws” – Do your children’s spouses share your family values?
• Long-term care costs – If you haven’t planned for long-term care, could the possible costs exponentially minimize your wealth?
• Minor beneficiaries – Are you leaving assets to persons under 18 who cannot take title to the money and where the money would be held by the Surrogate Court?
• Special needs beneficiaries – Are any beneficiaries subject to physical or mental disabilities, or receiving government benefits?
• Successful beneficiaries – Are family members successful in their own right, so that leaving them money compounds tax issues and exposes more assets to creditors?
• Taxes – Can taxes be minimized with appropriate strategies?
• Unsophisticated beneficiaries – Regardless of competence, do some beneficiaries simply not have the life skills to manage the wealth you are providing?

Just as there are myriad issues that could present risks to your family and wealth, there are a variety of tools to minimize those risks.  While a unique plan is created for every client, asset protection planning might include some of the following: 

• Lifetime gifting
• Domestic Asset Protection Trust
• Estate planning
• Trusts for minor beneficiaries
• Lifetime trusts for beneficiaries
• Maximizing retirement benefits
• Asset re-titling between spouses
• Business planning to segregate liabilities
• Business succession planning
• Personal liability reduction
• Tax planning 

At Porzio, our deep level of engagement with our clients, combined with our long-term relationships, allows us not only to suggest asset protection strategies at the beginning of our representation, but to continue to revise, refine and expand those strategies as your wealth and family changes as years pass.