Quite often I'll get a client that comes into my office with many questions regarding asset protection. Almost always they are very good questions that more people should know the answer to. So, in an effort to answer any questions or address any concerns you might have, here are some of the more common asset protection questions I receive.
How does creating a Limited Liability Company (LLC) help to protect my assets?
LLC's have become a very popular and powerful weapon when it comes to asset protection. An LLC is very versatile and provides protection from liability that is often desirable, especially in today's society where lawsuits are targeting anyone with perceived "deep pockets." Also, an LLC can allow you to do business in an efficient manner without being subject to the liabilities, restrictions, and in many circumstances the taxes of other types of businesses. Now that being said, all LLCs are not created equal, and some States have more favorable laws for LLCs. If you are interested with this form of asset protection, visit our website here and we can help you take the next step to protect your assets and loved ones.
How does the operation of my LLC change if I place my LLC into a Revocable Living Trust (RLT)?
This question just came up the other day as a concern of one of my clients, and it was a very good thing it did, because this is often a very big concern for people that they might not know the answer to. To answer the question: it doesn't change. Upon creation of an RLT you place many assets into the trust, but you remain in control of all of the assets. This does not change even if the asset you are placing into the trust is an LLC, which is good news for you!
I've heard that the only way to achieve "bullet-proof" asset protection is to create an Offshore Asset Protection Trust, is this true?
Let me start by saying that anyone claiming to have "bullet-proof" protection is selling you nonsense. In the real world, there's no such thing as 100 percent protection, but that doesn't mean you can't come close. Offshore Asset Protection Trusts (also known as Foreign Asset Protection Trusts) have been used successfully for many years because many foreign jurisdictions have had favorable trust legislation/case laws for a while now. Because of this, Offshore Asset Protection Trusts are certainly a good option, but they aren't the only way to go.
Nowadays, many US states have adopted similar legislation to the foreign jurisdictions, which has encouraged a boom in what we call Domestic Asset Protection Trusts. Some of the states that have developed favorable legislation include Nevada, Alaska, South Dakota, and Delaware. Now, you don't have to live in one of these states to realize benefits of Asset Protection Planning, and we do in fact help set up Domestic Asset Protection Trusts for residents here in Connecticut.
If you think it's time for you to consider Asset Protection for you or your family, don't hesitate to contact us here with any questions you may have!