How to Protect Estate Assets from Creditors

Speak with a qualified attorney about creating a smart estate plan

When you create an estate plan, you do not want to just be thinking about ways of saving money or passing on assets to beneficiaries; you also want to be thinking about how to protect your assets in the event that you or someone you are passing assets to encounters financial turmoil. Creditors, including the government in some cases, will not hesitate to take legal action to claim what is theirs, so having a plan of action in place to protect your assets from being seized is important. Here are a few strategies for protecting estate assets from creditors:

Transfer of Assets Into an LLC

One way to protect assets from creditors is to transfer assets into an LLC, or limited liability corporation. As its name implies, LLCs provide an individual with protection from personal liability, and also can protect a company from the liability of an individual owner. As such, if you are sued, your creditors will have limited rights to gain access to assets that are held in the LLC. Transferring assets into a corporation can also help to protect them.

Asset Protection Trust

One way to protect your assets is to create an asset protection trust, either offshore or in a state that allows asset protection trusts. Offshore trusts are one of the safest ways to protect your assets because a judge in your county will not have any jurisdiction in the country where your assets are located.

Qualified Retirement Plans

One of the best ways to protect assets (and save for your future) is to invest in a qualified retirement plan. Qualified retirement plans have unlimited protection from bankruptcy, ERISA plans are almost always protected too, except in the event that a QDRO (qualified domestic relations order) exists.

Homestead Protection

While the amount of protection that is available for a home varies from state to state, Texas has very strong homestead protections — stronger than those in most other states. A homestead protection allows you to declare part of your home as a “homestead,” thus making it off-limits to creditors. To learn more about homestead protections, contact an attorney.

Meet with an Attorney

One of the best ways to protect your assets from creditors is to make a solid plan early. To do this, meet with an estate planning attorney. An estate planning lawyer can help you to explore different options for protecting your assets both short- and long-term. If you are facing bankruptcy or asset seizure for other reasons, an attorney can also guide you through your options and provide you with representation against creditors.

Call John Powell III, P.C. Today

At the Pearland office of John Powell III, P.C., our experienced estate planning attorney is available to talk with you about your estate and your best options for protecting your assets today. We understand how important having a strong estate plan is, and we want to help. To learn more about John Powell III, P.C. and his experience and services, please call our law firm directly or send us a message telling us more about how we can serve you.