When Is The Best Time To Start Asset Protection Planning?
The short answer is – NOW! The truth is, we do not know what will happen in the future, which is why we always advise our clients to be prepared for anything. Part of planning ahead involves protecting your assets. If you have something worth protecting, then protect it properly by taking the right steps. If you live in Tennessee, you are in luck! This state is favorable to assets, so you should utilize it to the fullest. Not sure how? At Music City Estate Law, we are here to help!
Why Should I Protect My Assets?
You should be planning to protect your assets now, because one day you might find yourself in a situation where you could lose them. We encourage our clients to plan ahead, preparing for the worst. For example, if you get into a lawsuit and your assets are not protected, it could cause you some serious stress to try and protect them. A lawsuit would not be fatal to your assets, but trying to protect your assets afterwards only makes the process much more difficult.
Protecting your assets gives you leverage in negotiating and resolving a claim with the creditor. In fact, it can even keep the creditor from filing a claim in the first place. Again, if you wait to protect your assets later, the process will become complicated, costing you more money and creating more stress.
Why Can’t Assets Just Be Transferred To A Spouse Or A Child?
Asset protection planning is primarily for the purpose of business, such as protecting property like a farm or managing investments. If you were to transfer your assets onto a child, for example, then that would be highly suspect since this does not serve a business purpose. Along with this, three main factors stand in the way of giving your assets to a spouse or a child.
The Bankruptcy Code
- If you give your assets to your children or spouse, and there is filing of bankruptcy within 10 years, the bankruptcy court can pull those transfers back and look to the children to retrieve these, resulting, most likely, in attorney fees and other liabilities.
The Fraudulent Conveyance Acts
- This state law permits retrieving assets if it appears someone is merely holding them until the liability issue has lapsed.
Tennessee
- The state has created a framework for us to be able to protect assets or the assets of the clients. That framework does not include simply transferring assets outright to children or a spouse. It does, however, provide naming them as trustees of the trust, making them a beneficiary of some of the asset protection structures, or making them the manager of the LLC.
Planning to protect your assets is another step that you can take to help secure your future, saving you more time and money. The good news is, you don’t have to go through this process alone! At Music City Estate Law, we will be with you every step of the way, guiding you through all the steps needed to protect your assets. Don’t wait until it’s too late! Take control of your assets today by contacting our office!