Hello Larry, thanks for commenting. Your second question is a bit confusing as I’m not sure what you mean by the myrtle personal property. Common types of business entities are limited liability companies, corporations, and to a somewhat lesser extent limited partnerships. The outcome for the Florida LLC was less than exciting and leaves room for a Florida creditor to access a single member LLC in Florida within certain parameters. If you're considering holding your … Next, the Florida legislature has enacted many statutes which protect various types of assets from creditors of Florida residents. As I’ve mentioned a number of the strengths of Florida asset protection, the laws and potential asset protection benefit vary from state to state. I believe you’ve already answered my question in the above article but would like to confirm. Asset protection – assets exempt from creditors’ claims by statute or otherwise. Inheritance is not protected from creditors as an exempt asset class. View our book “Legal Mumbo Jumbo: Navigating 8 Common Areas of Law in Plain Language” on Amazon. It is one of the strongest asset protection tools available. There are some proactive things that can be done to protect one spouse’s assets from another spouse’s medical bills in FL. Many states offering an “in between level” of protection allow approximately $70 – $170,000 of homestead real property value to be claimed as exempt from creditors in a state action or bankruptcy proceeding. Sexual Harassment Accusations. On the “minimal protection” end of the spectrum, the state of Virginia only allows real property owners to exempt $5000 of the value plus $500 for each dependent or a maximum of $10,000 per married couple. A limited liability company (LLC) in Florida is perhaps the most flexible and accessible way to provide asset protection for “non-qualified” assets or assets not covered by one of the above strategies. The idea behind a land trust is that the creditor may, once again, not reach an asset because it is in the hands of the trustee and the beneficiary has no immediate interest to record a lien upon or otherwise attach. However, to you, the plaintiff’s ultimate goal is inconsequential because they can still file a complaint against you and you’ll still be required to hire a lawyer to file a legal defense to a lawsuit that may be entirely frivolous. A marital agreement, also known as a prenuptial agreement or postnuptial agreement in Florida, an important Florida asset protection strategy that is not often considered and yet is critical because an aggrieved spouse, as stated, is one of two “super-creditors.”  A Florida marital agreement is divided into two categories “pre” or “post” depending upon whether they are signed pre or post (before or after) the marriage ceremony. Too often, decisions by judges or juries are based more on emotion than on facts or the law and the result is a catastrophic damage award that wipes out a lifetime of hard work and investment. Do You Have to Live in Florida to Claim Head of Household Wage Garnishment Exemption? Some states only protect qualified accounts that are not for the benefit of the debtor, whereas other states do not impose this condition. If someone obtains a judgment against you, as the result of a lawsuit, your assets will also be at risk. 2. Tenancy by the Entirety. Annuities and Life Insurance are opposite sides of the same coin. Hello Lynne and thanks for your question. Hello Jag, you’re welcome and thanks for commenting. https://www.alperlaw.com/florida-asset-protection/florida-annuities/, http://www.assetprotectionsociety.org/pdf_files/APS.50.State.Summary.pdf, https://www.floridabar.org/the-florida-bar-journal/creditors-rights-under-private-annuities-and-grantor-retained-annuity-trusts-in-florida/, Florida Medicaid Asset Test [Managing the 5 Year Lookback], Trust Amendment [for Changing Estate Plans] in Florida, Updating Your Florida Estate Plan [the Winds of Change], Tenancy by the Entirety In Florida for Spouses, Florida Estate Planning Tips for Protecting Relationships, Smoothly Transferring Estate Assets in Florida, Planning Ahead for Trust and Estate Successors in Florida, Homestead or personal residence protection, Qualified accounts (IRAs, 401ks, and 403bs) and wage accounts, Domestic business entities (LLCs, corporations and limited partnerships), Marital agreements (pre-nuptial and post-nuptial), Domestic trusts (revocable (living), DAPTs, land trusts, other irrevocable trusts), Offshore trusts and offshore business entities, Checking accounts, savings accounts and CDs, Non-qualified investment accounts (mutual funds or trading accounts), Real property held in an individual’s name (not a personal residence), Business owned as sole proprietorship or general partnership, Personal property held in individual’s name. Florida common law protects property owned jointly by a husband and wife from the creditors of either spouse, using a type of ownership called tenants by entireties. An important distinction is if something is not appreciating in value or creating income then perhaps it should not be considered an asset. Some state laws extend this to traditional IRAs as well. Most irrevocable trust plans involve areas of advanced planning, such as estate tax planning in Florida, that requires the assistance of an experienced Florida estate planning attorney. A few dollars spent on attorney fees prior to signing the agreement can save substantial attorney fees in the future. My only asset is a 2017 Fifth Wheel Trailer that is paid off and a 2012 F350 which the bank owns. An income-producing asset may be your ownership in a Florida business or a rental property. Sometimes the various entities are multi-layered or combined to accommodate certain strategies. Asset Protection Strategies in Florida The options/strategies that are available for asset protection in Florida are: Homestead or personal residence protection; Annuities and life insurance; Qualified accounts (IRAs, 401ks, and 403bs) and wage accounts; Domestic business entities (LLCs, corporations and limited partnerships) In Florida and a number of other states, the protection is available if the proceeds are for the benefit of another and not used for the insured. Call (407) 444-0404.Schedule a consultation online.Or submit the form below. Your asset protection strategy will depend somewhat upon the nature and value of your stuff as well as your priorities and goals. Date Night. Is it legal to get a title loan on your car (place a legal lien on it with FL DMV) not from family but a known friend (from his business actually). Asset Protection . Required fields are marked *. The beneficiary of a land trust may be an individual or an entity such as an LLC. So, as a strategic asset protection plan, options 1 – 7 from the strategies above move from the most common options for average folks at number 1 to the most expensive and least common approach at number 7. The genre of Florida trusts that are “irrevocable” and thus asset protected when they are established include the following types of trusts: The thing to know about Florida irrevocable trusts in the above list is that they are all intended for different purposes. Our firm helps businesses and individuals with customized asset protection planning and implementation. If your State allows it, you can title your personal residence as “Tenants by … I would use the money to pay back rent and bills i’m behind on. The short primer on LLCs is that the members are similar to the shareholders of a corporation, and the managers are similar to the officers. A Florida corporation may be described as a “more established” and “more formal” older brother to the Florida LLC. Florida asset protection is a legal process where a debtor structures his or her assets—such as property, cash, businesses, and investments in such a way that makes it much more difficult for a current or future creditor to collect on those assets. is the Managing Attorney of Gibbs Law Office, PLLC and is licensed to practice in Florida, and California. Asset protection uses legal methods to better protect what you have and your income from collection on the judgment. How can I protect my assests from creditors due to my spouses medical bills, such as long term care. By Phillip B. Rarick, Miami Asset Protection Attorney. Various generic exemptions, such as health aids, medical savings accounts, and unemployment benefits. Because judges respect legal precedent, the common law is applied in courts even though the principals are in our Constitution or in Florida statutes. Before addressing specific methods of Florida asset protection, it is important to get clearer about what is an asset. Annuities can be either immediate or deferred, and the cash value is protected under most state statutes with the amount of protection varying based upon the state laws. Reorganization of asset titles and asset transfers done before creditor problems arise are effective if liability does eventually arise. Although the judge in that case ultimately reduced the verdict and the case was settled, the “hot coffee” fact pattern was repeated recently when a police offer filed a similar lawsuit against Starbucks Corporation. I encourage you to continue being a wise consumer and doing your research. Transfers done in the face of a legal threat may withstand fraudulent conveyance attack when properly planning minimizes badges of fraud. Steven J. Gibbs, Esq. One of the few exceptions to this is your employer-sponsored IRA, 401(k), or another retirement account. It can range from a lawsuit related to a negligent act that you performed, such as causing a car accident, to a lawsuit related to the foreclosure of property for which you have stopped paying the mortgage. McDonald’s Restaurants found this out years ago with the infamous “hot coffee lawsuit,” Liebeck v. McDonald’s Restaurants, in which an elderly customer won a large judgment by jury (2.8 million) after asserting that the coffee she spilled on herself was unreasonably hot. For the unprotected items, developing and evaluating legal options to better protect those assets from collection. An annuity is a financial product created by the insurance industry that provides a rate of income at a contractually agreed rate. Many states have homestead exemptions that protect your principal residence if you lose a lawsuit. thank you for great information. Qualified accounts that are exempt under state laws from creditor attachment include IRAs, Roth IRAs, and Keogh plans (tax deferred pension plan geared to self-employed individuals). You will want to consult with a licensed financial … At Bratton Estate and Elder Care Attorneys, our lawyers recommend putting an asset protection plan in place before you need it. Every state provides for the filing of corporations, as it is an important incentive for local businesses as well as an important revenue stream. The partnership may be governed by a limited partnership agreement in the same way that an operating agreement is utilized for an LLC. If you have collection concerns, I highly suggest you connect with someone who regularly practices commercial litigation, something we don’t get involved in at this point. Both financial and legal expertise is needed to craft a sound asset protection plan, especially if you have significant assets to protect. A common concern for many clients is asset protection, which means shielding your assets from creditors. Whereas an annuity provides a benefit during the policyholder’s lifetime, life insurance is purchased primarily for the death benefit to be available for the policy holder’s beneficiaries. The benefit of the protections offered to annuities can be significant. I define an asset as everything you may own that has value. For some, asset protection is as simple as keeping funds in the bank and using a safe deposit box. In Florida, it is important not to confuse the homestead tax exemption from the exemption that is applicable for asset protection purposes both under the state laws as well as the federal bankruptcy laws in that state. Last week, our Part One post of “Protecting Assets from Lawsuits and Judgments” described the many kinds of personal and professional liability that can make somebody susceptible to a judgment or lawsuit. 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