Why the Right Insurance is So Important for Your Asset Protection Plan

The first step in any plan to protect your assets should involve obtaining the right insurance. Many self-employed individuals, for example, do not realize that they need specific insurance in order to protect their assets. One such example is a physician.shutterstock_236845816

While most physicians understand that medical malpractice insurance is something they must have, other professionals should also consider the benefit of errors and omissions insurance. Financial advisors and lawyers are just a few of groups who should consider the benefits of using insurance as the cornerstone of their asset protection plan. The errors and omissions insurance can be helpful in the event that someone else sues you as a result of losses.

Even if the ultimate loss is not your fault, the former client may be looking for someone to take the blame and therefore you could end up in the hot seat. An umbrella insurance policy may also be a crucial component of this essential part of your asset protection plan. Many wealthy and successful individuals are more likely to be sued because other individuals believe that you have the assets necessary to support a lawsuit. A liability policy can help to form the first shield of protection for your assets when someone is hurt on your property or when someone else tries to hold you liable for damage or injury to property.

Playing Asset Protection in Defensive Mode

As we cannot protect your life in every possible contingency, a good defense can be a good offense against those who would otherwise take your assets.shutterstock_100931329

This includes umbrella insurance to supplement your liability insurance, perhaps equal to your net worth or a multiple of a net worth. This can help to defend from attack as can statutory exemptions which might vary from state to state.

Careful placement of your assets can also help whether with a less liable spouse, an LLC or an S Corp. You should always work with an asset protection attorney who has experience in this field to determine what is most appropriate for you.

Both an LLC and an S Corp are flow through structures where taxes are reported on personal returns. Another option is to use a family limited partnership which can dissuade creditors since they cannot access partnership assets and can procure only limited access to distributions.

Three Tips for Asset Protection Planning 

Making sure you’ve reduced risks associated with your assets is an important part of your overall planning for finances and your estate. Read on to learn more about five key tips to get started. shutterstock_60555508

Consider the Pros and Cons of Offshore Money

Unfortunately, some recent cases involve courts mandating that debtors bring back overseas assets through “repatriation orders”. If you do not comply, the court can issue a bench warrant leading to contempt of court. Make sure you know the rules and current interpretations in the U.S.

Make Sure You Can Explain Your Asset Protection Plan

It’s not very valuable to you if you cannot walk through how it works. Imagine being asked about your planning structure in deposition- could you easily explain the setup? The best plans are those that you can understand and see the benefit of. Make sure you work with an experienced estate planning attorney.

Know That the Planning May Become Completely Visible to Creditors 

Even if your plan is successful in shielding your assets, creditors might be able t know what’s in it. A plan that requires secrecy usually has other complex elements like ensuring that a former spouse does not speak to creditors or help from an experienced tax specialist when you must report the activity on returns. Talk with your asset protection attorney about the best structure for your plan.

Elder Law Tips: 7 Scams That Target Seniors

Unfortunately, the elderly are frequently targeted in fraudulent schemes because the individuals carrying out these scams believe these individuals are more vulnerable and are more likely to have accumulated wealth. What follows are seven of the most recent and common scams targeting elderly individuals. 1D1iOB5glGAXlnOxXmQJ2CG7dNc6GG0GXY-G8vdLRBE

IRS Phone Scam

Recently seniors received phone calls threatening arrest and driver’s license suspension for nonpayment of back taxes. The fraud earned the scammers more than $5 million.

Health Care Scam

Seniors in this fraud scheme are asked to provide personal information in order to receive help with health insurance. That information can be used for identity theft.

Great Grandchild Claims

Sometimes, elderly individuals will receive communication from an alleged great grandchild asking for money. They are advised to verify the identity before sending any funds.

Unethical Financial Advice

Some individuals will claim to be professional financial advisors, making investments on a senior’s behalf. Individuals should always be carefully vetted before being used for financial management or advice.

Obituary Scheme

In this situation, individuals will call the family of a recently-deceased relative and claim that money is owed or that a package needs to be delivered. The “package” is then sent to the family cash-on-delivery, but it’s usually empty or worthless.

Prescription Drug Ruse

With prescription costs being a primary concern for elderly individuals, many turn to the Internet for cheaper prices. Sometimes, this can mean that money is taken without the delivery of any drugs. Make sure you fully investigate a site or service before signing up.

Funeral Plot/Service Scams

Unfortunately, some funeral homes might encourage seniors to purchase a casket or burial plot when they intend to use cremation. Read the fine print and make sure a family member knows your wishes.

Sadly, these scams are all too common. One of the best ways to combat scams is to ensure your estate planning and elder planning have considered many options. Get advice from an experienced attorney today at (601) 925-9797.


8 Asset Protection Must Dos

Follow the 8 steps below to increase the chances that your assets are protected. In a time when just one blow to your assets could wipe them out or severely set back your own retirement, it’s simply prudent to plan ahead and guard yourself against major risks. shutterstock_190576304

  1. Select the appropriate business entity, like an LLC
  2. Evaluate your corporate veil (if you have set up an entity, you need to be clear about recordkeeping and have those materials reviewed by a specialist at least once a year)
  3. Keep track of all proper procedures and contracts (foregoing this could expose you to serious liabilities)
  4. Keep business insurance at all times
  5. Get an umbrella insurance policy, too, but read the fine print to determine what it will and won’t cover
  6. Put some assets into a spouse’s name, if you can
  7. Evaluate a possible homestead exemption: Exceptions related to your personal residence can be critically important when considering your assets as a whole.
  8. Determine whether your state allows “tenancy by the entirety”. This means that you could have your personal residence titles in a particular way so that if one spouse is sued, the property can’t be attached by a lawsuit. To determine whether this applies, and what other options you have for asset protection, contact an experienced attorney today at (601) 925-9797.

Asset Protection Trusts: Guidelines for Efficient Integration

One of the most popular approaches to estate planning has to do with safeguarding assets against possible losses. Asset protection trusts are one common way to protect property for you and your beneficiaries. shutterstock_120265729

Asset protection trusts refer to irrevocable trust structures in which a trustee holds property and distributes it out under his or her discretion. The trust protects the assets from being exposed to risk through divorce, a beneficiary’s creditors, or other predators in the future. There are two primary categories for asset protection trusts: third party trusts and self-settled trusts. As the name suggests, a third party trust involves a trust being set up by one party to benefit another whereas a self-settled trust is established by one party for his or her own benefit.

Passing on assets to children or grandchildren these days could potentially be risky in such uncertain times, what with bankruptcies, lawsuits, and divorces all possible. Asset protection trusts can also guard against another common client concern: that a beneficiary will blow through all the money too quickly. In cases where a beneficiary develops a disability later in life, without proper planning this beneficiary may have to spend a large sum to support the needed care while also being disqualified for medical benefits.

These situations call for third-party trusts such as:

  • Trusts for the benefit of adult beneficiaries- This is ideal for those who are not good or comfortable with managing money, those who may get divorced in the future, or those who have an addiction problem.
  • Trusts for the benefit of minors- Since minors can’t legally accept an inheritance, this can be a way to provide assets in the future.
  • Trusts for the benefit of disabled individuals- A large inheritance could disqualify someone from government benefits while forcing them to spend through the assets they receive.
  • Trusts for surviving spouses- This is a popular option if you are concerned that your spouse will remarry or will be unable to manage the inheritance properly.

Consider the flexibility offered in these kinds of trusts and contact our office today for more information. Get our advice at 866-925-9797.


Estate & Asset Protection Planning

Did you know that if you haven’t created your own estate plan, the IRS and the state will default to the plan they have created for you?

That can be a scary thought, let alone a scary reality.

Intentional and thoughtful planning is the only way to ensure that your inheritance will be passed on, after your death, as you best see fit. Allow your assets to end up where you want them to end up, rather than where the state would like them to end up. Be proactive with Asset Protection Planning.

Morton Law Estate Planning

What is Asset Protection Planning?

Asset protection planning is proactive, legal consideration and action that protects your assets from third party creditors, such as, lawsuits, divorce, and judgements.

Who is Asset Protection Planning For?

Asset Protection Planning is important for individuals who are most likely to get sued for one reason or another. For example, physicians are often cautioned to plan for protection. We recognize that life throws unexpected turns to everyone, however, so for this reason, Asset Protection Planning is suitable for most anyone with assets worthy of being protected.

Digital Assets

Digital assets are becoming increasingly common. If you are the keeper of potentially valuable digital assets, we recommend the Kiplinger article, Protect Digital Assets After Your Death.

Seek Professional Guidance

As is true of most trusts, asset protection trusts are complicated and particular. We always recommend meeting with a professional, whose focus is Estate Planning.

A little bit of planning now will go a long way for you and your loved ones later.

Call Morton Elder Law at 866-925-9797 today!

~ Ronald Morton


Five Key Steps For Physicians to Reduce Estate Taxes and Protect Heirs

These days, physicians have a lot to worry about as they grow their assets. Many, after years of residency, are plunged into a higher income bracket, but this can come with risks. Litigation, for example, can expose all those new assets of a physician to serious risk. That’s why it’s so important to take steps early to protect your assets and engage in regular review as your wealth grows. shutterstock_95239396

There are a few basic steps you can take to safeguard yourself, but there are many options when it comes to asset protection planning as well as your estate. As your situation changes, of course, it’s important to reconsider what you need to update.

Step 1: Update Your Will

Step 2: Avoid Probate With Trusts and Other Tools

Step 3: Consider Tax Reduction Strategies like gifting or an ILIT

Step 4: Review Beneficiaries

Step 5: Update Regularly

The first three steps are something you can visit while meeting with an estate planning attorney. The last two highlight the importance of an annual review to ensure that your documents are still in line with your wishes. Following these five steps can be really important to protect the new wealth you are growing into. Don’t let your hard-earned assets be exposed to major risks- investigate what you can do to protect it today. Contact us for help at (601) 925-9797.

Insulating Your Assets Against Lawsuits:Getting Started

Lance Armstrong has done it- insulated his assets from being totally exposed to creditors. But there are reasons that other people outside of public figures should considering doing the same. While it’s very difficult to imagine all of your money being entirely protected from creditors, there are steps you can take to protect yourself with business planning and estate planning. shutterstock_258583025

One of the approaches to doing this is setting up “hurdles” for creditors. While technically this allows the creditors to still gain access to your assets, the structure of the hurdle is such that they will be unable to do so without having to “pay to play.” For some creditors, it’s simply too expensive to tear through your careful planning. Many opt to settle instead.

Anyone at risk of being sued should consider asset protection planning, because all it takes is one lawsuit to expose your home and a few cars to major risk. Step one in this process is ensuring that the proper insurance policies are in place, particularly those that limit liability. This kind of critical umbrella coverage is essential for safeguarding against the high costs of even just one lawsuit from a car accident or similar incident.

A second layer can be done using trusts that help to shield assets. Money for heirs is placed inside the trusts to protect those assets, but trusts can also be good tools for protecting children from the fallout of a divorce settlement or a lawsuit. Make sure you’ve taken an all-encompassing approach to your asset protection planning. Contact us today to get started or review your existing plan at (601) 925-9797.

Estate Planning Parent Fears: Passing On Assets Without Spoiling Children

This is an issue that many of our clients express during their first meetings with us. Parents with wealth are concerned about leaving just enough to their children to allow the children to succeed without leaving too much so that the heirs would become “spoiled”.  shutterstock_113853856

When it comes to setting children up for success without making them too spoiled, parents can do a lot to install traits and virtues that promote behavior the opposite of spoiled. These virtues include generosity, thriftiness, patience, curiosity, perspective, and perseverance. How can parents promote this from birth? According to financial columnist Ron Lieber, who developed this list, parents can select balanced vacation options, reduce materialism on a daily basis, provide allowances that are not based on chores, and have clear conversations about money with children from an early age.

It’s not just about selecting the right estate planning tools, but determining what tools will work in combination with the example set forth for children. The first stage of doing this involves putting in the time and the effort to think about this fear of having spoiled children and what can be done to avoid it. The second stage is in developing clear statements about goals and values for the children. Once you have accomplished this, it’s time to put together an action plan that lays out how these goals can be achieved.

Working together with establishing goals and confronting fears, estate planning can be an empowering process that puts parents in the right perspective to think about their legacy. We can help you accomplish this process- call us today at (601) 925-9797.