There are many asset protection alternatives.  These include offshore trusts, domestic asset protection trusts (called Ohio Legacy Trusts in Ohio), irrevocable life insurance trusts and limited liability companies.  But relatively simple exemption planning should always be the initial focus.  Exempt assets (those which applicable laws already make it difficult or impossible for creditors to reach) include funds in qualified retirement plans, IRA accounts (in most states) and some part of the equity in your primary residence.  Some states like Florida and Texas have a virtually unlimited homestead exemption.  Most other states exempt a portion of the equity in your residence.  For instance, Ohio recently raised its homestead exemption to $125,000 (which may effectively provide a $250,000 exemption for a married couple).  Maximizing the assets in these exempt categories can be a very cost effective and efficient means of asset protection.

Many individuals – – such as physicians and other professionals, business owners, high net-worth individuals and those at high risk for creditor claims – – will require more sophisticated planning.  But focusing on assets like those in qualified retirement accounts is always an important initial step.