Asset Protection Planning Lawyers in Annapolis, MD
The goal of asset protection planning is to shield your property from the reach of creditors. You may want to protect your assets from the creditors of your children, spouse, or even your own creditors. However, in order to be successful, asset protection planning must be done early, correctly and non-fraudulently. It is important to seek competent legal advice because it is a challenging area of the law, fraught with pitfalls and penalties for the unknowing.
Engaging in asset protection planning is important if you or your beneficiaries have a substantial risk of being sued. People with high risk litigation profiles include doctors, lawyers, and business owners. It also includes individuals who are likely to become involved in a divorce or other domestic dispute.
Many professionals think that maintaining malpractice insurance is the same thing as asset protection planning. This is simply not true. Even though you maintain malpractice insurance, your assets may still be subject to your creditors. Therefore, you will want to engage in asset protection planning while also maintaining your malpractice insurance policies.
It is important to remember that not all assets are open to creditor claims. For example, qualified retirement accounts governed by ERISA are beyond the reach of creditors because of specific federal law.
Some people think that they are engaging in asset protection planning by transferring assets to their children outright. However, by doing this, you not only lose control of your assets, but also give your children’s creditors access to the transferred asset. It is also important to remember that transfers of more than $14,000 may require a gift tax filing and erode your estate and gift tax unified credit amount.
Asset protection is an important topic to discuss with a qualified professional. If you are unfamiliar with asset protection planning, the estate planning and trusts lawyers at Franke Beckett LLC have compiled a list of articles on this topic. These articles were presented at continuing education courses held in Annapolis and at national conferences and can provide you with some general information on the topic. The articles do not constitute legal advice and cannot replace a discussion with a competent attorney about your specific situation. Knowing the advantages of asset protection planning and the risks involved is important when planning for the future.