Asset Protection Planning
An asset protection plan requires careful advance planning and thoughtful consideration. You have worked hard for the assets you possess and you want to ensure that they are adequately protected – either from creditors, former spouses or from excessive taxation. Moreover, if you are the owner of a closely-held business, it is crucial to establish an asset protection plan in order to ensure protection of the business as well. Alan Sohn understands how important an asset protection plan is to you and your family, and in some cases to the vitality of your business.
There are several options and alternatives available as part of an asset management and protection plan and Alan Sohn will thoroughly consider your unique needs and objectives in order to advise you on the appropriate asset protection plan. Once the appropriate asset protection plan is determined, our trusted Chicago asset protection attorney will carefully draft the necessary legal documents to effectuate the plan.
Asset management includes the establishment of an overall financial plan, with the appropriate amount of diversification. Some of the options available as part of an asset protection plan include:
- Umbrella liability insurance. An umbrella insurance policy provides additional blanket coverage for miscellaneous events and generally provides coverage when the limits of your homeowners or auto insurance policies have been met.
- Tenancy by the Entirety. Married couples can choose to own their home as tenants by the entirety, instead of joint tenancy. Tenancy by the entirety automatically grants the surviving spouse a right of survivorship upon the death of one spouse and provides protection from certain creditors.
- Holding assets in limited liability entities. If assets are held in a limited liability entity, such as a limited liability company (LLC) or a limited liability partnership (LLP), judgment creditors of a member are limited to seeking the right to receive the member’s distributions from the entity, rather than seeking an ownership in the assets themselves.
- Dynasty trust. Assets are held in a trust for the benefit of successive generations. As long as the assets remain in the trust, the assets and any income on those assets can then pass from generation to generation without additional estate or generation-skipping taxes, allowing the trust to accumulate vast sums over a period of time. Illinois has eliminated the Rule Against Perpetuities and now allows dynasty trusts to continue indefinitely. Assets in the trust are protected from creditors in the case of lawsuits, bankruptcy or divorce.
Because of the wide range of options available for an asset management and protection plan, and due to the detailed and specific drafting requirements of many asset protection documents, it is important to consult a knowledgeable asset protection lawyer.
Contact Alan Sohn at (312) 236-7005 to discuss how we can develop your asset protection plan.