Ten Common Asset Protection and Liability Minimization Maneuvers:
You worked hard to get to where you are, but life is not fair, and there are a lot of people out there who want what you have. The following is a non-exhaustive list of some common asset protection and liability minimization tactics. These maneuvers should be made only "by prescription". In other words, if not carefully planned and executed by an asset protection attorney, you could end up doing yourself more harm than good. For example, there are numerous income tax, sales tax, documentary stamp tax, insurance, estate planning, regulatory, financial, business, personal and practical considerations that must be carefully analyzed before implementing any of these tactics. Additionally, one must take into account the facts and circumstances existing at the time to gauge whether any of these moves might be considered a fraudulent conveyance. That being said, here is a list of items that you may want to consider discussing with your attorney, as well as your accountant.
· Convert Corporations to Limited Liability Companies.
· Minimize or eliminate personal involvement in your business’s operations.
· Avoid signing any personal guarantees or at least carefully draft limitations on their scope and duration.
· Retitle non-homestead real estate in the name of a Limited Liability Company with a properly drafted operating
agreement.
· Leverage investment property to pay off mortgages on homestead property.
· Convert non-exempt cash, stocks and bonds into exempt retirement accounts, annuities and life insurance.
· Establish and maintain adequate corporate documentation for all businesses, including minutes of annual meetings,
bylaws and operating agreements as applicable.
· Separate business assets and operations into separate legal entities, and separate investment properties into
separate legal entities (i.e. don’t keep all your eggs in one basket).
· Avoid or Incorporate any form of joint venture, general partnership or joint tenancy.
· Purchase enough of the right insurance with coverage limits that approximate your net worth, including General
General Business, Business Interruption, Property & Casualty, Umbrella and, if applicable, Malpractice insurance.
However, keep in mind that: 1) what you are told is covered may not be what the fine print in your policy says; 2)
your coverage has deductibles and limits that may not be practical considering the amount of your premiums; and 3)
if your policy accidentally expires, you could have a gap in coverage.
By: Eduardo R. Arista, CPA, Esq.
Ph: 305-444-7662
E-Mail: Ed@AristaLaw.com |
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