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Key Takeaways
- If you own a business, it is important to keep your business assets and personal assets separate to avoid a lawsuit.
- It is possible to protect your assets through a trust and other legal structures (such as an LLC) that allow you to keep a business separated from personal assets.
- Our attorneys use different strategies to help professionals, small business owners, property owners, and others throughout New York City protect their assets against lawsuits, judgments, liens, and fraud. Insurance does not always protect against these threats.
- Sometimes, our beneficiaries need protections from themselves as well as outsiders. Our NYC asset protection lawyers can help create trusts to help limit the beneficiary’s access to trust income and principal.
- We can also assist seniors with protecting their assets in preparation for Medicaid long term care.
What is an Asset Protection Attorney?
An estate planning attorney, also deemed an asset protection attorney, helps clients best allocate their resources to guard against unforeseen liabilities. We focus on three main areas of asset protection:
- Safeguarding assets from lawsuits
- Shielding inheritances from creditors, divorce, and spendthrifts
- Long-Term care planning
Protecting Assets from Lawsuits
We live in a litigious society. In New York alone, thousands of frivolous lawsuits are filed each year. Many of them end in settlements that may absorb an unfair amount of someone’s assets. If you own a business, you want to make sure that your business assets are separate from your personal assets.
Protecting your assets is more important than ever. Without a massive overhaul of our legal system, the risk and potential liability will continue to rise.
Assets can be at risk, due to many vulnerabilities:
- Professional malpractice liability
- Personal liability of corporate officers and directors
- Lawsuits by former business partners
- Personal injury suffered on your premises
- Personal injury resulting from a motor vehicle accident
- Liability as guarantor for the debts of another
- Liability arising from misconduct
Asset protection strategies involve creating trusts and legal structures to hold business, such as LLCs and corporations. For example, any income producing property should be sheltered from personal assets using an LLC. Likewise, some vocations have inherent risk, such as a medical practice, necessitating the need for a separation between the practice and the doctor.
Working with an asset protection attorney means safeguarding your wealth. You also have the added bonus of empowering yourself in the face of liability. Our firm works with clients to help preserve their wealth and protect their assets. We use proven, legally-sound strategies that are custom-tailored to your unique case.
Burner Law Group, P.C. represents clients throughout New York City and Nassau and Suffolk counties in Long Island, including professionals, small business owners, and property owners amongst others. We help protect assets against potential litigation, judgments, liens, and fraud.
Insurance alone does not always protect against these threats. We help clients protect their wealth using a variety of strategies. We do what it takes to keep your wealth yours.
Shield Inheritance from Creditors
Asset protection should always be considered for beneficiaries. By leaving assets to family members in a trust, they are protected from creditors, and, if necessary, their own bad spending habits. A beneficiary trust, also called an inheritor’s trust, can also be drafted so that estate tax is avoided on the beneficiary’s death.
Our firm has expertise in assisting clients in arranging their estate planning so that any inheritance they pass on at death is protected from potential creditors and divorce. Creditors may initiate litigation against a person with assets in a trust, foundation or other entity. But not all assets are owned by the person they wish to sue.
Sometimes, we do not just need to protect our beneficiaries from outsiders, but also from themselves. We can set up trusts that are structured to limit the beneficiary’s access to trust income and principal.
Benefits of placing assets into a trust (or other entity) for your heirs, include:
- Assets are generally not subject to claims against their creditors
- Assets are generally not marital property in case of divorce
- Avoiding estate tax at beneficiary’s death
- Preserving assets to last for the beneficiary’s lifetime
The asset protection lawyers at our firm know how to evaluate current client holdings. We work with our clients to identify the best ways to protect wealth from a variety of creditors. Whether your civil suit involves negligence or malpractice, we can help.
Our firm has a solid working knowledge of:
- New York and Out-of-State trusts
- Domestic business entity formation
- Exempt asset protections under state law
- Negotiation and preparation of pre/post-marital agreements
The strategies we use vary depending on the client, nature of assets, country of origin, and applicable tax regulations. Our ultimate goal as asset protection lawyers is to project the status of current assets in a manner that is effective, legal, and ethical.
Medicaid Asset Protection Trusts
Our elder law specific asset protection services focus on helping seniors protect their assets from the high cost of long-term care. Without seeking out a Medicaid experienced attorney, many seniors impoverish themselves privately paying for long term care for a spouse or child. We are happy to explain ways to avoid liens on a family home or liquidating assets using a Medicaid Asset Protection Trust.
Frequently Asked Asset Protection Questions
A Medicaid Trust allows seniors and disabled individuals who may need long term care in the future to qualify for Medicaid long term care under the strict asset guidelines. By placing assets in a Medicaid Trust ahead of time – 2.5 years before needing home care or 5 years before needing nursing home care – the individual can protect those assets from the cost of long term care and qualify for Medicaid.
You can protect beneficiary’s inheritance from creditors and divorce by placing those assets in an inheritor’s trust. The beneficiary’s right to principal must be limited by an “ascertainable standard” such as health, education, maintenance or support. Even greater protection is afforded to the beneficiary when a third party is the trustee with discretion to make distributions.
If you are beneficiary of the trust, then your assets are not protected. New York State does not allow self-settled asset protection trusts, but other states such as Delaware, Nevada and Alaska. Our attorneys can help a New York resident set up a domestic asset protection trust (DAPT) in one of these favorable states. If married, consider a SLAT.
An irrevocable trust protects you from creditors because the assets you put in the trust are no longer yours. You can nominate a trustee to make distributions to your family and friends, but not to you.
A Spousal Limited Access Trust (SLAT) is an irrevocable trust for the benefit of your spouse and heirs. Since your spouse can use funds in the trust, you indirectly benefit as well, but since the assets are not in your name they are protected from your creditors and can be drafted to protect the assets from your spouse’s creditors as well. However, SLATs must be constructed with care to avoid being considered a fraudulent conveyance.
If you own a business or income producing property in your own name, then all of your assets are subject to creditors and lawsuits. If you incorporate or form an LLC, your liability is limited to the assets held by that business. Fr this reason, you should set up an LLC for each piece of property you own.
In New York State, an inherited IRA is not protected from the beneficiary’s creditors. This is a good reason to make a trust the beneficiary of a retirement account if the beneficiary has debt issues. However, the Secure Act eliminated the “lifetime stretch” available to adult children inheriting an IRA (except for a disabled child) so the proceeds of the IRA would have to be distributed within 10 years. If the amount of the IRA is substantial, this could pose serious tax issues, least limit the usefulness of the trust.
One option is to name a Charitable Remainder Trust (CRT) as beneficiary of the IRA – which allows you to stretch out payments to the child over their lifetime (or to multiple beneficiaries over a 20 year span). A charity of your choice ultimately receives the asset and the child gets income over his or lifetime – because the money is invested the child ends up receiving as much or more than he or she would have without the CRT.
