Holding property as joint tenants has numerous advantages. It can be convenient, and it can generally avoid probate of the jointly held assets. It is a big misconception, however, that joint tenancy provides very much asset protection.
A recent Ohio Court of Appeals Decision, White v. Parks is a perfect illustration of the drawbacks of
A lawyer accused of hiding assets was released from prison last week — after serving 14 years in jail. H. Beatty Chadwick was sent to prison in 1995 for allegedly hiding $2.5 milion in assets in connection with his divorce. By the time he was released last week from a county prison in suburban Philadelphia
Asset protection planning generally involves transferring and/or re-titling some or all of your assets in order to better protect those assets from claims of creditors. Not surprisingly, however, there are statutory prohibitions against transferring your assets with the intent of avoiding your legal obligations. Whenever any assets are transferred or re-titled for protection purposes, it is critical
A number of offshore jurisdictions have enacted trust laws that provide significant protection for debtors. One example is St. Vincent in the West Indies. Its trust laws have a number of separate provisions that make assets held in a St. Vincent trust very difficult for a U.S. creditor to reach. One such provision
There are a number of relatively simple strategies an organization can use to provide significant protection for its assets.
1. Separate Entities. Consider creating a separate entity (possibly a limited liability company) to hold real estate, machinery, or assets relating to a new line of business. If there were a future judgment against the corporation
A debtor’s personal residence is a natural target of his or her creditors. Some states (Florida, in particular) provide special protection for your home against claims of creditors. Currently, Florida’s protection is so strong that some debtors have re-located to Florida solely to take advantage of this protection. Texas also provides a very strong homestead exemption. Ohio, however, currently provides
Irrevocable life insurance trusts (ILITs) can be a great estate planning tool under the right circumstances. ILITs have the added benefit of providing significant asset protection.
Life insurance owned by an ILIT is not generally part of the insured’s estate (for both federal and Ohio estate tax purposes). An ILIT will be most effective if it
A limited liability company (LLC) will generally provide better asset protection to its owner than a corporation.
A limited liability company (“LLC”) is a hybrid type of legal entity that has some characteristics of a corporation and some characteristics of a partnership. Owners of an LLC are called members; they can elect to receive pass through tax
There are many asset protection strategies, and the more expensive and complex ones are not always the best. I like the comment made by Jay Adkisson (a nationally recognized asset protection planner) in the May 11, 2009 issue of Forbes Magazine. He basically says the best ways are the old ways.
While that is a big generalization, there
Corporations and limited liability companies (LLCs) provide significant liability protection to their owners. Shareholders of corporations and members of limited liability companies generally are not responsible for debts of the corporation or LLC. A recent Ohio case, however, serves as a reminder that creditors may attempt to "pierce the corporate veil" and hold an owner
