Important Things That You Should Know About Asset Protection Planning
Bankruptcy lawyer riverside suggests asset protection planning must not be an alternative to liability and professional insurance. It must supplement insurance. Asset protection plans repel plaintiffs and it doesn’t require to pay legal fees to defend an individual from a lawsuit. Insurance also offers asset protection planning because it can help a borrower survive a claim or a fraudulent transfer claim. If someone gets sued, ask the insurance company pay someone to defend it as well as to settle it. It is what the premiums are for.
Property protection plans attempt to grasp a balance in giving the client enough control so his assets will not be gone. On the other side, the debtor should not have much domination that a creditor can effectively argue that the asset protection structure and the borrower are one-and-the-same. At this point, it might be ignored on alter ego or other same theory.
Remember that business assets are for business entities and personal assets are for trusts. Business entities like partnerships, LLCs, and corporations are for vehicles for commercial tasks. It is not intended to act as personal piggy banks. If a personal asset is put into a business entity, the possibilities increase exponentially for the entity to be pierced by a lender in some cases like alter ego. Riverside bankruptcy lawyer recommends personal properties must be placed in a trust. Trust assets are protected by a long and solid framing of law. These assets should be properly funded and drafted.
Plan before of a claim grows
Planning beforehand is one of the things a legal adviser would recommend because the moment that a claim arises things cannot be undone by the fraudulent transfer law. Keep in mind that a claim growth can be earlier than anyone might think. Late planning for asset protection will likely make the situation worse than before. The client that plans late is as good as he had done nothing and the bankruptcy filed by the debtor can be dismissed.