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In today’s litigious society, asset protection planning is of the utmost importance for our clients. Clients with high-risk jobs – such as doctors, accountants and attorneys – are increasingly facing attacks on their assets in the form of lawsuits and creditor claims. Our asset protection strategies help them safeguard their wealth from seizure and loss. 

Asset protection reaches beyond high-risk and wealthy clients. Small and large business owners and individuals often overlook the importance of protecting their assets. Our asset protection attorneys work to help individuals, families and business owners in Ohio navigate potential risks and avoid liabilities. 

What is Asset Protection?

Asset protection includes a variety of strategies designed to shield a business or an individual’s wealth from lawsuits or creditor claims. Asset protection strategies erect legal hurdles and walls around an individual’s wealth. 

Assets vary and can be personal or business-related. Personal assets include cash, property, land and personal property such as boats, jewelry, vehicles and investments. Business assets might be machinery and raw materials, property or intellectual property such as patents and royalties.

How Can an Attorney Help Protect a Client’s Assets More Than, Say, a Financial Planner?

Financial planners are indispensable tools when it comes to planning for one’s financial future. Financial planners can help you budget and develop tax-saving strategies to help you achieve your long-term financial goals.  

Where financial planners and attorneys differ is in legal matters. While financial planners can help with best practices, they fall short of an asset protection attorney’s ability to offer legal advice and draft necessary legal documents. Only an attorney can keep your assets properly organized and protected through an asset protection trust. 

Attorneys play a crucial role in asset protection when it comes to estate planning. Failing to hire an attorney to handle your estate can have dire outcomes. Hiring an asset protection attorney is the best way to ensure your assets are protected while you are alive.

Who Needs Asset Protection?

A common misconception about asset protection is that it is something only wealthy people need to utilize. Although high-net-worth individuals are especially at risk of being targeted by creditors and lawsuits, the truth is that anyone can benefit from asset protection. These include established business owners and entrepreneurs who are just starting out.  

Essentially, you should consider asset protection if you: 
  • Work in a high-liability field
  • Are facing a lawsuit, or are at risk of a lawsuit
  • Have signed a personal guarantee
  • Have accumulated or are about to inherit a large sum of money

The key to asset protection is that you absolutely must do it before you need it (i.e., before someone comes looking for money). Otherwise, none of these solutions will help. The time to start thinking about and preparing these strategies is now. 

Important to Know:

Our Asset Protection Strategies

With offices in Cleveland and Columbus, we offer a vast array of asset protection strategies and options, including homestead exemptions, equity-stripping and domestic and offshore asset protection trusts. We also offer a comprehensive asset protection package, which includes the following: 

Domestic Asset Protection Trust

Domestic asset protection trusts are a type of irrevocable trust operated by a trustee that allows the grantor to be the beneficiary. Domestic asset protection trusts offer a high level of safety from creditors, lawsuits and judgments against an individual’s estate. 

A popular type of domestic asset protection trust is known as a Legacy Trust. Unlike other trusts, you may not serve as your own trustee in a Legacy Trust, but a spouse or other trusted individual must be serve as trustee.   

You can still retain significant rights in a Legacy Trust, including the ability to: 

  • Remove and appoint a trustee
  • Veto distributions
  • Withdraw up to 5% of assets annually
  • Live in residences given to the trust
  • Provide counsel on investments of the trust’s assets
  • Have trust assets distributed to anyone other than the transferor or the transferor’s creditors or estate.

In addition to influence over protected assets, Legacy Trusts offer other perks. In a Legacy Trust, creditors have a shortened time frame to make claims against the trust, and in the case of anyone trying to attack the Legacy Trust’s assets, the burden of proof falls on the creditor. 

Although you cannot be the trustee of your own trust, you can be the beneficiary. You may also designate a Revocable Trust as the beneficiary. Revocable Trusts are trusts that the grantor can alter or revoke at any time.  

Naming a trust as beneficiary is a popular choice in cases where intended beneficiaries are minors, have special needs or might be a liability when entrusted with a large sum of money. Revocable trusts give the beneficiary legal rights to the assets while avoiding complications associated with wills and probate fees.

Notice of Transfer of Personal Property

It is not uncommon for individuals to transfer property into trusts to prevent others from making claims on the property. Property can be subject to claims from former partners, ex-spouses, creditors and tax authorities. Having a notice of transfer document ensures your personal property is put into your trust and is governed by your appointed trustee. 

It’s essential to be proactive in asset protection and transfer property into trusts long before trouble hits. Last-minute property transfers are generally ineffective. For example, if you put a property in a trust while knowingly facing bankruptcy, a trustee in bankruptcy can reclaim the property. Likewise, if an individual in poor health makes a property transfer but passes away shortly after, the property will still be subject to taxes.

Affidavit of Solvency

An affidavit of solvency is a signed document that states that a transfer of assets will not render an individual or business bankrupt. 

An affidavit of solvency certifies the following: 

  • The assets are not the products of illegal activities
  • You have the full right to transfer the assets
  • Transferring the assets will not leave you insolvent
  • There is no intention to defraud creditors
  • There is no pending litigation or other court actions against you
  • You are not involved in any administrative proceeding (other than opinions on investments)
  • You do not foresee filing for bankruptcy 

At KJK, we have a team of Ohio-based attorneys specializing in asset protection and are available to guide you in the available avenues to keep your assets safe. Call us today at (216) 696-8700 or (614) 427-5750 for a consultation.

We’re Here for you:

Contact KJK Today

At KJK, we have a team of Ohio-based attorneys specializing in asset protection and are available to guide you in the available avenues to keep your assets safe. Call us today at (216) 696-8700 or (614) 427-5750 for a consultation.

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