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Moorestown NJ Asset Protection Attorney

Our New Jersey Attorneys Can Help You With Estate And Asset Protection.

Moorestown NJ Asset Protection Attorney

Our New Jersey Attorneys Can Help You With Estate And Asset Protection.

Asset protection planning in estate planning involves strategies and techniques to safeguard an individual’s assets from potential creditors, lawsuits, taxes, or other threats. The primary goal is to shield assets to preserve them and pass them on to intended beneficiaries according to your wishes.

Many people don’t realize that unexpected events, from business ventures gone wrong to personal accidents, can threaten their financial security. This is where asset protection comes in.

Asset protection is like putting on a financial shield. It’s a way to safeguard the things you’ve worked hard for, like your house, savings, and retirement accounts. This can be important in many situations, such as:

  • If you own a business and get sued by a customer.
  • If you’re in an accident and someone tries to sue you for damages.
  • If you’re going through a divorce.
  • If you have a child with special needs, who may need financial assistance in the future.
  • If you are trying to plan for your future and minimize estate taxes

By planning ahead with asset protection strategies, you can ensure your financial security and peace of mind.

Quick Summary:

  • What is Asset Protection?
    • Asset protection means taking steps to protect your belongings, like your home, savings, and retirement funds, from excessive taxes and unexpected problems and legal issues and to minimize tax exposure in estate planning.
  • Why is Asset Protection Important?
    • Asset protection planning is essential for individuals and families seeking to safeguard their wealth, mitigate risks, and secure a stable financial future for themselves and future generations. By implementing tailored asset protection strategies with the guidance of qualified professionals, individuals can enjoy greater financial security and peace of mind.
  • Common Asset Protection Strategies:
    • Irrevocable Trusts: Transferring assets into an irrevocable trust can shield them from creditors and lawsuits, offering strong protection for beneficiaries while potentially qualifying for government benefits. It can also help to minimize estate tax implications.
    • QPRTs (Qualified Personal Residence Trusts): QPRTs are tailored for primary or vacation homes, allowing you to retain residency while reducing estate taxes on the property’s appreciation for your heirs.
    • Land Trusts: By transferring real estate ownership to a trustee, land trusts offer privacy benefits, potentially deterring lawsuits and simplifying probate processes, though they may not protect against all claims or suit all real estate transactions.
    • Limited Liability Entities: Entities such as limited liability companies (LLCs) and limited partnerships (LPs) can provide liability protection for assets held within the entity, reducing personal exposure to creditors’ claims.
    • Medicaid Asset Protection Trusts (MAPT): MAPTs are designed to protect assets while ensuring your eligibility for Medicaid long-term care benefits. 

What is Asset Protection?

Life can be unpredictable. Even with careful planning, unexpected events can arise that threaten your financial security. Asset protection is a proactive approach to safeguarding the things you’ve worked hard for, like your house, savings, and retirement accounts. 

Why is Asset Protection Important?

There are many reasons why asset protection is important. Here are a few common situations where it can provide valuable peace of mind:

  • Safeguarding Assets: Asset protection planning helps shield assets from potential risks, such as lawsuits, creditor claims, divorce settlements, and other financial liabilities. By implementing strategies to protect assets, individuals can preserve their wealth for themselves and their intended beneficiaries.
  • Minimizing Risks: Without proper protection, assets are vulnerable to various threats, including legal judgments, business failures, medical expenses, and unforeseen circumstances. Asset protection planning mitigates these risks by establishing legal structures and mechanisms to safeguard wealth and minimize potential losses.
  • Preserving Family Wealth: Many individuals seek to pass on their wealth to future generations or specific beneficiaries. Asset protection planning ensures that assets remain intact and can be transferred according to the individual’s wishes, helping preserve family wealth and financial legacies.
  • Maintaining Financial Security: Protecting assets through estate planning provides individuals and their families with financial security and peace of mind. By safeguarding assets from external threats, individuals can better protect their standard of living, retirement savings, and long-term financial goals.
  • Preventing Estate Depletion: Without proper protection, assets can be vulnerable to erosion due to legal expenses, taxes, judgments, and other liabilities. Asset protection planning aims to prevent estate depletion, ensuring that assets remain available for the individual’s needs and future generations.
  • Lawsuits: If you own a business or are in a profession with higher risks, a lawsuit from a customer or client could put your personal assets at risk. Asset protection strategies can help shield your personal property from being seized to pay a judgment.
  • Unexpected Events: Accidents, injuries, or sudden medical bills can create a significant financial burden. Asset protection can help ensure you have the resources you need to weather these storms without jeopardizing your long-term financial goals.
  • Divorce: During a divorce, assets are divided between spouses. Asset protection planning can help you ensure a fair division of property and protect assets you want to keep, especially if you have separate assets brought into the marriage.
  • Planning for the Future: If you have a child with special needs, you may worry about their financial security after you’re gone. Asset protection strategies can help ensure they have the resources they need while still qualifying for important government benefits.

By taking steps to protect your assets now, you can ensure your financial future remains secure, no matter what life throws your way.

What Are The Common Asset Protection Strategies?

Taking steps to protect your assets, investments, and resources from danger is asset protection. To secure your valuables, try these typical methods:

Irrevocable Trusts

An irrevocable trust is a legal arrangement where you transfer ownership of assets to a trustee (another person or institution) who manages them for the benefit of beneficiaries you designate (often children or loved ones). Once assets are placed in an irrevocable trust, you generally give up control of them.

  • How it Protects Assets: Since you no longer legally own the assets in the trust, they are typically shielded from creditors and lawsuits filed against you.
  • Who It’s For: This works well if you have assets that may be subjected to estate taxes and want to leave your assets to loved ones (like kids or grandkids) and minimize the amount of taxes that will be paid. This type of trust also offers protection from lawsuits or creditors. 
  • Pros: Strong asset protection reduces your taxable estate, ensures assets go to intended beneficiaries and can qualify for some government benefits.
  • Cons: Loss of control over assets, generally cannot be revoked or changed once established, may have capital gain tax implications.

QPRTs (Qualified Personal Residence Trusts)

A QPRT is a special type of irrevocable trust designed for your primary or vacation home. You transfer ownership of the house to the trust but get to keep living there for a set period. After that time, the house goes to the beneficiaries you named in the trust (often children).

  • How it Protects Assets: The value of your home’s appreciation during the trust term is generally removed from your estate for tax purposes. This is because the IRS uses a low-interest rate to calculate the value of your remaining interest in the house, reducing the overall taxable value.
  • Who It’s For: This strategy is best for homeowners who want to pass their house to heirs at a reduced estate tax cost. It can be particularly useful if you expect your home to increase significantly in value.
  • Pros: Lowers estate taxes on your home and keeps you living in the house for a set period.
  • Cons: This trust is irrevocable, so once you give up ownership, you generally cannot change its terms or cancel the trust. You give up ownership of the house after the trust term, which may not be suitable if you plan to live in the home longer than the trust term and have some tax filing requirements. If you pass before the term expires, any anticipated gift or estate tax benefits are lost. 

Land Trusts

A land trust is a legal arrangement where you transfer real estate ownership (land or buildings) to a trustee who holds the title on your behalf. As the grantor, you still control the property and enjoy its benefits, but the ownership is hidden from public records.

  • How it Protects Assets: A Land Trust keeps the real owner of a property’s name hidden from public records. This makes it harder for someone looking online to see what real estate you own. This can be helpful if you’re worried about lawsuits or want to keep your personal information private.
  • Who it’s For: This works well if you want to keep your real estate ownership private or are worried about lawsuits coming after your property. It can also make things easier when passing it on to heirs.
  • Pros: Offers some privacy for property ownership, and can simplify probate in some situations.
  • Cons: Doesn’t necessarily protect assets from all claims (like those with existing liens), may have some ongoing costs associated with maintaining the trust, and may not be suitable for all types of real estate transactions.

Limited Liability Companies (LLC)

Limited Liability Companies can provide liability protection for assets held within the entity, reducing personal exposure to creditors’ claims.

  • How it Protects Assets: When you form an LLC, it becomes a distinct legal entity from its owners. Personal assets are generally shielded from business debts and claims. Creating an LLC establishes a barrier between your personal and business assets.
  • Who it’s For: Business owners who want to protect their individual assets.
  • Pros: Limited liability protection is the primary benefit. It offers more flexibility than other business structures regarding taxation, and formation is straightforward.
  • Cons: Courts can “pierce the corporate veil” of an LLC under certain circumstances, putting your personal assets at risk. 

Medicaid Asset Protection Trust (MAPT)

Medicaid Asset Protection Trusts are a valuable estate planning tool designed to protect assets while ensuring you remain eligible for Medicaid long-term care benefits. 

  • How it Protects Assets: A MAPT is irrevocable during your lifetime. Assets placed in a MAPT, that remain there for five (5) years, are not considered an asset under the Medicaid eligibility rules. The person applying for Medicaid may not be the trustee of the trust. In some situations, this person may receive income from the trust.
  • Who It’s For: Someone who wants to pre-plan for long-term care and has assets that are trying to protect for their spouse or children.
  • Pros: Allows Medicaid eligibility for someone who may not otherwise qualify and it safeguards these assets from Medicaid and state recovery programs. 
  • Cons: For the most part cannot be altered or canceled, estate taxes may apply after the surviving spouse’s death, to qualify the language of this type of trust must be compliant with Medicaid. 

Call Us For A Consultation Today.

Do you need help protecting your stuff?

Whether you have a few savings or run a business, an asset protection lawyer in Moorestown, NJ can help you figure out what you own and how to keep it safe.

Posternock Apell, PC can help!

Our experienced attorneys, Robyn Goldenberg and Jeff Apell will work with you to create a plan that fits your needs. We go beyond just wills and estates, and we offer affordable options. Our services include real estate, litigation, and employment law to address our clients’ personal and professional lives.

Our lawyers have years of experience dealing with all sorts of asset protection issues, from figuring out what your stuff is worth to setting up legal plans to keep it safe.

Ready to talk?

Contact Posternock Apell, PC today for a consultation. We can help you protect your assets and plan for the future.