How Do You Keep What You Built?
More and more people are using the legal system to deprive others of their life’s work. Our asset protection attorneys receive calls and email everyday from people like you who want to protect their assets from these types of potential attacks. Certainly the current economic downturn and real estate bust has spurred an increased interest in asset protection planning. The problem for many people is that by the time they think about asset protection, it’s too late. During the earlier part of their careers, Richard Barid and Michael Smith worked as creditors’ attorneys, helping banks and other lenders with collections and bankruptcy issues. That experience gives them a unique perspective on asset protection planning. There are laws known as fraudulent conveyance or transfer laws which will nullify transfers of assets that are made with the purpose of putting assets out of a creditor’s reach.
The statute of limitations generally applicable in such statues is around four (4) years, but each state has their own statutes and the time periods may vary. This means that any transfer made within the last five years will be targeted by a creditor to be set aside. So, if you are in financial difficulty today, any transfers that you completed over the last four (4) years could be subject to set aside by a creditor. The fraudulent conveyance statutes are not based on lawsuits or judgments, but simply “claims”. A claim is a situation that could give rise to a liability. Think loans, business relationships, etc. So, even if you have not been sued or given notice of any claim, it still may be too late for you to do asset protection planning. If you have any personal guarantees, then any attempts to put the assets you have pledged (which is everything you own) out of reach of creditors or potential claimants will not be viewed favorably by the courts.
The time to engage in asset protection planning is before you have financial difficulty. If you engage in asset protection planning after you are in financial distress, the consequences can be serious. If you are currently experiencing financial difficulty, then you need to speak with a bankruptcy or workout attorney (our attorneys may be able to help with this type of situation or refer you to alternate counsel). Partners Michael H. Smith and Richard Barid have extensive experience in bankruptcy and collections law which gives them unique insight into the issues involved. It’s also important when planning for asset protection that you do things right. A flawed plan is no better than no plan at all. An LLC set up by your CPA or done yourself through the Secretary of State’s website is vitually worthless. Having a qualified asset protection attorney draft a proper operating agreement and ensuring that the formation requirements are properly followed will ensure that your LLC works when you need it. Business owners, professionals such as doctors, dentists, lawyers and accountants, and property owners in particular should be aware of the risk associated with conducting their business, practicing in their respective fields, and taking responsibility for others. Assets can be at risk due to a number of vulnerabilities, including:
- Professional malpractice liability
- Personal liability of corporate officers and directors
- Lawsuits by former business partners
- Personal injury suffered on your premises
- Personal injury resulting form a motor vehicle accident
- Liability as guarantor for the debts of another
- Liability arising from misconduct
The asset protection attorneys at Smith Barid, LLC represent professionals, small business owners, property owners, and other clients with the goal of protecting their assets against potential litigation, judgments, liens, and fraud. Insurance alone does not always adequately protect against all of these threats, but is an important part of an overall asset protection plan. We help clients protect their wealth using a variety of strategies including the use of special trusts, business entities and other legal arrangements. We employ a variety of strategies for clients in the proper position to engage in asset protection planning to protect assets including:
- Wyoming LLCs
- Domestic and offshore trusts
- Domestic and offshore and domestic business entity formation
- Exempt asset protections under state law
- Negotiation and preparation of pre and post-marital agreements
The exact strategies employed by our asset protection attorneys may vary depending on the client, the nature of the assets, the country of origin, and the tax regulations that apply to those assets. The ultimate goal is to protect your assets in a manner that is effective, legal and ethical.