You may have worked for many years to build up your assets, but without the right protection, your assets could be lost through a lawsuit, a bankruptcy, or a divorce. If your assets are not properly protected, you should arrange at once to consult with a Utah asset protection attorney.
Utah’s families and business owners rightly want to enjoy and control their own assets, determine who else enjoys them, reduce the taxes on those assets, protect them from crooks and creditors, and pass those assets on to the next generation.
What can you do to protect what you’ve earned? What assets can be legally shielded? How can a Utah estate planning lawyer help you protect your estate, your family, and your future? If you’ll keep reading this brief discussion of asset protection in Utah, these questions will be answered.
Why is Asset Protection So Important?
Protecting your assets from creditors is important for everyone, because anyone can be sued. If your assets are not fully protected, and if you are on the losing end of a creditor’s lawsuit, your loved ones could be faced with financial hardship. You might even have to file for bankruptcy.
A Utah estate planning lawyer can familiarize you with a variety of asset protection tools that include establishing an irrevocable Domestic Asset Protection Trust, maximizing your IRA contributions, or using a limited liability company or family limited partnership to shield assets.
What is the Goal of an Asset Protection Plan?
What you need is a plan – an asset protection plan. An asset protection plan puts legal strategies in place before a lawsuit or a claim against you arises – strategies that can deter a potential claimant or prevent the seizure of your assets after a judgment.
Asset protection planning may include the creation of separate legal and business structures such as corporations, partnerships, and limited liability companies. The strategy that will work best for you depends on the assets you own and the creditors who are likely to pursue claims against you.
An estate planning attorney can help you create the asset protection plan that’s right for you. However, an asset protection plan works only if you establish your plan before a claimant or a creditor brings a lawsuit against you.
Liability Insurance May Not Be Enough
If you are currently being sued, or if you are about to be sued, a court can undo a transfer of your assets, so the best way to protect your estate is to put an asset protection plan in place now, before a problem arises. The most common, conventional asset protection is liability insurance.
But if your liability insurance provides insufficient coverage, if the terms and conditions of your policy are too restrictive, if a payment was not made, or if the insurance company goes out of business, your liability insurance can fail as an asset protection plan.
You may need other options, such as an asset protection trust. Utah is one of only seventeen states that makes creating a Domestic Asset Protection Trust (DAPT) both legal and affordable.
How Does a DAPT Work?
You should consider establishing a DAPT if you are someone who is likely to be sued – if you are a doctor or a business owner, for example – or if you want to protect securities, cash, real estate, a business, or some other property or asset like a boat or a cabin, for example.
Utah allows you to fund a DAPT with whatever assets you care to shield. You keep control over the assets, and you may designate yourself, your spouse, and other loved ones as beneficiaries if you need the assets in the future, provided that a co-trustee makes the distribution decisions.
You may name a friend, relative, or advisor as your co-trustee. For your asset protection trust to shield assets effectively against creditors, there must be one or more Utah trustees, it must hold at least some assets in Utah, and you must declare your solvency after placing assets in the trust.
What Else Should You Know About a DAPT?
A Domestic Asset Protection Trust must be an irrevocable trust, but in Utah, some limited flexibility can be written into the trust document that allows for the replacement or removal of trustees and allows changes to the eventual distribution of your assets at the time of your death.
Still, the key element of a DAPT is its irrevocability. Revocable trusts can help you protect your estate from the probate process, but a revocable trust offers no protection from creditors. However, irrevocable asset protection trusts can effectively protect your assets from creditors.
Utah law prevents future creditors from gaining access to any of the assets in a Domestic Asset Protection Trust. When an asset is moved into a DAPT, a current creditor has two years to dispute the transfer, but sending the creditor a notification can reduce that deadline to 120 days.
How Will an Estate Planning Lawyer Help You?
A Domestic Asset Protection Trust can provide you with substantial benefits, but there can also be risks – tax risks as well as creditor risks – if your DAPT is not drafted and established with great care by a Utah estate planning attorney who has substantial asset protection experience.
While there is every reason to begin asset protection planning immediately – because no one can predict the future – effective asset protection planning does not happen on a whim or in a rush. The best asset protection planning is about making thoughtful choices and informed decisions.
A Utah asset protection attorney has seen all of the ways that your assets can be threatened. The right attorney will offer you experienced asset protection guidance and helpful insights. There may be other asset protection options – that are just right for you – that you may not know about.
Do You Need a Comprehensive Estate Plan?
A good estate planning lawyer can also create the other key legal documents that constitute a comprehensive estate plan – a last will and testament, a durable power of attorney, and an advance healthcare directive, for example.
Everyone’s planning needs are unique, but your estate planning attorney can help you set up a personalized asset protection plan or comprehensive estate plan that provides maximum security and protection to your assets, your business, and your loved ones.
Peace of mind regarding your assets and your family’s future is just one phone call away. To have that peace of mind for yourself, make the call to a good estate planning attorney promptly.