Florida is Still a Debtor Friendly State for Asset Protection
The Florida Supreme Court recently ruled that a charging order is not the only remedy for creditors of LLC owners. My blog post of August 2, 2010 outlines the Florida Supreme Court decision. While the decision applied to a single member LLC, it could apply to multi-member Florida LLC’s as well. For the time being, Florida LLC owners – particularly single member LLC owners – must consider alternatives for protecting assets (such as a Florida limited liability partnership or reorganizing the LLC in another state such as Delaware).
It is important to keep in mind, however, that Florida is still a very debtor-friendly state. Florida has a virtually unlimited homestead exemption, and its statutes and case law are generally favorable to debtors from an asset protection standpoint.
For example, a Florida appellate court recently ruled that certain trust assets were beyond the reach of a beneficiary’s creditor, even though the trustee had improperly allowed the beneficiary to manage the trust assets. The court in Miller v. Kresser noted that the trustee had clearly abdicated his responsibilities, but nevertheless upheld the so-called spendthrift provisions of the trust.
So despite the recent decision of the Florida Supreme Court in Olmstead v. FTC, Florida is still generally a very good jurisdiction with respect to asset protection.
Nice post. I wonder if LeBron had some potential creditors that he was concerned about.
Thanks for your comment. I guess some people (including LeBron) move to Florida for reasons other than asset protection. But your comment reminds me that a lot of NBA players and other high profile athletes would likely benefit from a good asset protection plan.