There are important asset protection planning strategies available, but they can be complex and tricky to navigate. Asset protection planning is the process of analyzing the assets you own and arranging or rearranging that ownership in order to maximize protection of those assets. Asset protection is not tax evasion or defrauding creditors when it is properly designed and implemented. Asset protection planning involves planning for situations during your lifetime as well as after your death.
At Wilcox Attorneys, PA, we can provide the guidance you need to successfully navigate this complex area of the law and bring you peace of mind. We will analyze your assets and advise you on the proper Fayetteville Arkansas asset protection and business planning strategies that will help you achieve your goals and objectives.
Fayetteville Arkansas Asset Protection and Business Planning Strategies
Start Asset Protection Planning Before Claims Arise
The most effective asset protection plans must be set into motion before a claim or liability arises, not after. This is because transactions that occur after a claim arises are likely to be considered violations of the “fraudulent transfer” law and will be undone. Another important reason is that many people don’t realize when a claim actually arises. Once you have received a demand for payment or you have been served with a lawsuit, it is far too late.
It should also be understood that, undoing a fraudulent transfer is not the only consequence of late planning. This is a misconception. Instead, both the debtor and the person who assisted in the fraudulent transfer can be liable for the attorney fees of the creditor. The debtor may also lose any chance of discharging that particular debt in bankruptcy.
Asset Protection Planning is not a Substitute for Insurance
Asset protection planning is not meant to be a substitute for either liability or professional insurance. Instead, it should be considered only supplemental insurance. Contrary to popular belief, asset protection plans do not deter lawsuits, nor do they pay for legal fees required to defend against a lawsuit. If you are sued, the insurance company should pay to defend the lawsuit, as well as pay to settle it.
Personal Assets vs. Business Assets
The general rule is, trusts are for personal assets and business entities are for business assets. This means that various business entities, such as corporations, partnerships and limited liability corporations, are meant to be vehicles for business assets. Whereas personal assets should be placed in trusts.
Business Planning for Arkansas Businesses
Business formation and succession planning can be challenging due to the various tax issues involved. This is especially true if the business is family owned. A Limited Liability Company (LLC) is now the most flexible and preferred entity for most operating businesses. LLCs combine tax planning flexibility with administrative simplicity, legitimate asset protection, and a built-in plan for succession of interest after the business owner retires or dies. At Wilcox Attorneys, PA, we will assist you in determining the right entity for your situation and draft customized agreements to meet your specific needs, including operating agreements and buy-sell agreements.
Wilcox Attorneys, PA will also provide you with advice on difficult decisions regarding what will happen with your business upon your retirement, death, or disability. Unfortunately, many business owners do not consider a plan for how they will leave their business. Without a comprehensive plan, your family could be forced to sell the business or its assets when you die.
Planning how you will exit from your business is an important part of your estate and retirement planning. Proper planning now can provide you with retirement income, reduced income and estate taxes and peace of mind for the future.
