Call Today for a Free Confidential Consultation - (310) 475-0321

REALITY CHECK – ASSET PROTECTION PLANNING

July 7, 2020

Dear Clients and Friends: In today’s volatile economy, many clients have expressed concerns about how to protect their assets from lawsuits or other potential claims. An Asset Protection Plan may allow you to insulate some if not many, of your assets from certain liabilities that may come up both in business and personally. It is a part of your family estate planning. Asset Protection Planning is a proactive legal action that may protect your assets from current and future creditors. It is achieved by taking assets that may be subject to creditors’ claims and repositioning ownership to make the asset more difficult to attach and further out of the reach of creditors. Asset Protection Planning (APP), the planning taken to safeguard one’s assets, has three key elements to it: Timing of the plan. Level to which the risk has risen. Extent of the asset protection plan. TIMING OF THE PLAN – If you put an APP in place when there is no known risk, the probability it will hold at a later date is very high. The probability of the plan working diminishes with each subsequent risk event. It starts with you finding out that some event has created a heightened level of risk. From there it goes to an oral or written communication that notifies you of the risk. Then comes the lawsuit, the trial, the verdict, and the levy or attachment. The longer that you wait to set up protection the more likely it is that your assets will be at risk. LEVEL TO WHICH THE RISK HAS RISEN – When concerned about an event that might occur, make sure you are carrying the right type and amount of liability insurance, and that it covers the event that you are worried about. If there is risk beyond your insurance coverage, either it is not covered, or the amount involved is beyond your maximum coverage, you then need to add coverage and consider taking actions to protect assets from your personal liability. EXTENT OF THE PLAN – The plan that you establish can protect a single asset, such as your home or other real estate or even cash. In order to separate your assets from liability, they need to be owned by someone other than you. Most of our asset protection plans involve giving to your children, or to your spouse, in a way that you can utilize the assets for their benefit. With proper planning, you can separate marital assets between husband and wife, recognizing that one spouse’s separate property is NOT responsible for the separate liabilities of the other spouse. Each factual situation should be evaluated to determine if a particular asset is community or separate and how repositioning ownership could bring a level of protection for those assets. Also, recognize that if you separate assets to each spouse, that ownership will apply in the event there is a future dissolution of the marriage. TOOLS THAT WE USE. We start with a standard estate plan, including revocable trusts and pour-over wills, and then for asset protection, we branch out to separate property trusts for each spouse, and […]

Read more

Preparing for Coronavirus: The #1 Legal Document Every Adult Needs to Have

July 7, 2020

Dear Clients, Colleagues, and Friends: Now is a great time to be proactive and plan ahead should you or a loved one fall ill. One of the most important and relatively easy things you can do (and should do) is to select a medical agent and set up your advance healthcare directive. What Is a Medical Agent? A medical agent (also called a healthcare agent, healthcare surrogate, a healthcare proxy, or a medical proxy) is a person you authorize in a medical power of attorney to make decisions about your medical care if you are too ill to make them yourself or are otherwise unable to communicate your wishes. Why is it important to choose a medical agent now? As of April 14, there are 602,977 total cases of coronavirus in the U.S. Of those, only 12,784 are in critical condition (about 2.12%). So even if you get sick, you’ll most likely have mild symptoms and recover quickly. However, since no one knows exactly how they will be affected by the virus, it’s best to plan for the worst and hope for the best. Part of that planning is making sure someone can make healthcare decisions for you if you fall ill and are unable to make those decisions for yourself. Factors to Consider in Choosing Your Medical Agent A medical agent is an important role, and the person you choose will have the power to make critical healthcare decisions—like consenting to a treatment plan, whether to accept or refuse medical treatment, and which healthcare providers or hospitals to use for your care. As a result, it is crucial to think carefully about who you choose to fill this role. Here are some factors to consider when selecting an agent: Emotional maturity. People handle stress differently, and not everyone is able to set aside their emotions and make level-headed decisions when someone they love is suffering. You should choose someone who is able to think rationally in emotionally difficult circumstances, even if that means you must look outside of your family to find the best person for the job. Location. The person you choose to act as your medical agent should be someone who lives close by and is able to act on your behalf very quickly in the event of a medical emergency or if you need your advocate to serve in that role for an extended time period. Consider naming several alternate agents to account for someone’s potential unavailability. Is willing/able to serve. Acting as a medical agent can be a time-consuming and emotionally draining job. Make sure that the person you choose is willing and able to set aside the time necessary to serve as your patient advocate. Don’t just assume the person you want to be your medical agent is willing: Be proactive and ask if he or she is willing to take on that role. Keep in mind that if you are elderly, you may want to avoid naming a friend or family member who also is older, as there is a greater chance that they will experience a mental or physical decline at the […]

Read more
Call Now Button