There may be no area of law as controversial as asset protection. However, the crash of the US economy has garnered an increase in interest by many clients in utilizing this area of law for their benefit. Asset protection is complex and often scary but it is a legitimate area of law that incorporates many other areas of law, including bankruptcy, tax, corporate law, contracts, creditor-debtor rights, insurance law and estate planning. Any attorney practicing in the area of asset protection must understand how these areas of law work together and have a comprehensive understanding of Florida’s Fraudulent Transfer Act.

I am certain that most attorneys could share compelling stories about their clients who might have benefited from such preparation. Many of these stories are not of wealthy clients trying to evade paying taxes or legitimate creditors; they are stories of hard-working families who, because of an accident or unforeseen circumstances, lost everything.

Although Florida attorneys cannot offer Florida Asset Protection Trusts to their clients, there are numerous other asset protection techniques which can be utilized to help limit liability exposure for clients. Some techniques include: the use of LLCs or limited partnerships, titling assets as tenancy by the entirety, enhancing retirement benefits, engaging in life insurance planning, the use of certain out of state business entities, purchasing educational plans, and the use of prenuptial or post nuptial agreements.

Whether you offer your clients asset protection planning or not, attorneys all have a duty as advisers to educate ourselves in this growing area of law. Some advocates of asset protection planning suggest that attorneys who practice in certain areas and do not advise their clients in asset protection techniques may be exposing themselves to malpractice claims in the future.

Having a good business plan is like having a detailed map for a long road trip: if you make the right turns and anticipating detours, the trip can go more smoothly. Part of that business plan should include proper legal preparation, but many small businesses today lack this key element. If you set up your business correctly, you can limit your exposure to liability now and avoid losses to your business and family in the future. Any business venture comes with a litany of legal issues and it is imperative that you seek the advice of a business attorney.

Most business owners think they’re too busy to plan for the day they will leave the business and consequently put off succession planning. Leaving business succession for another day may prove fatal. Illness, incapacity, or death can come at any moment. This can be devastating to a business because it is difficult to make rational decisions in emotional times. Establishing a succession plan should be a top priority for any business regardless of its size. Like a well-run relay race, the handing over of a company should be a carefully planned and strategized transition. It must be well executed if it is to be successful.

At Wild, Felice & Pardo, PA, we are able to provide a full range of legal services to our business clients. Whether buying a new business, selling an old business, or operating a current business, our lawyers are trained to examine all aspects of business planning and see to it that all possible issues are addressed. We pride ourselves on providing accurate advice for your specific business needs. For more information on how to shield your business from risk and liability, contact our South Florida law firm for a free consultation.

1. Waiting too long to start planning. The longer your asset protection plan has been in place, the stronger it will be. It will also cost less to do the planning long before you have a problem. Once a lawsuit has been filed against you, any transfers you make can be overturned. In order to battle a lawsuit effectively, make sure you have an asset protection plan in place long before you need it.
2. Mistakenly committing fraudulent transfers. If you transfer assets to a friend or family member in order to avoid losing them during a settlement, you may find it does you no good. This is not illegal, but the courts can reverse the transfer and hold the transferee partially responsible.
3. Trying to hide your assets. This is no longer possible. Even moving assets offshore does not prevent them from being discovered. Eventually, lawyers will uncover the existence of the asset. In some cases, having the asset offshore may protect it, but it will not prevent it from being discovered.
4. Assuming you can outsmart the creditors. Those trying to collect their debt and the lawyers working for them have done this before. You will not figure out a way around the system.
5. Handing control of your assets over to someone else. Often called the “poor man’s” asset protection, signing over your wealth to another person is never a good idea, even if he is a trusted friend or family member. You may have to give up some control at some point, but deciding you will protect your assets by giving them over to a sibling or adult child is a mistake. Discuss your options with an experienced asset protection attorney before proceeding.
6. Assuming asset protection and estate planning are the same thing. Asset protection is part of any strong estate plan but they are not the same thing. It is important to remember a living trust does nothing to protect you from creditors.
7. Confusing bankruptcy law and asset protection law. In a state like Florida, newer bankruptcy laws do not affect the unlimited homestead exemptions. You have less protection in bankruptcy court, so filing for bankruptcy should be used as a last resort.
8. Assuming it is too late to establish an asset protection plan. It is never to late to do this. Doing something is better than just allowing the courts to have their way with you. At least make an effort to protect your assets. You never know when you may be faced with a situation where your assets are at risk.
9. Not getting your foundation estate plan in place as part of your asset protection plan.
10. Trying to do it yourself. You only have one shot at protecting your assets correctly. Be sure to use an attorney that specializes in asset protection.

As with any other transaction of importance, it is always recommended that you seek the advice and care of an attorney when creating and implementing your estate plan but either out of laziness or financial inability, many Floridians are still failing to plan for the protection of their assets.  If you should fail to retain an estate planning attorney to work with you on your asset protection plan, at least follow the eight steps below and assure that your family isn’t left with nothing but a large pile of debt.  As the old adage goes, if you fail to plan, you are in actuality planning to fail.

Step 1 – Sign a financial power of attorney.

Step 2 – Designate a health care surrogate.

Step 3 – Calculate your net worth.

Step 4 – Review your beneficiaries.

Step 5 – Write a will, or update the one you have.

Step 6 – Plan for state estate taxes.

Step 7 – Title your assets correctly.

Step 8 – Donate, donate, donate.

While these eight steps will provide you with basic protection, for a true and complete asset protection plan, please contact your estate planning attorney and work together to create a plan for your future and the financial future of your family for generations to come.

Until January 1, 2010, our law firm will provide a complimentary will to any person who schedules a free consultation to discuss their asset protection plan.  Contact Wild Felice & Pardo, P.A. at 954-944-2855 or via email at info@wfplaw.com.