Here is another attorneys who seems to think they are protected: https://www.alperlaw.com/florida-asset-protection/florida-annuities/ Thank you. Plaintiffs’ lawyers operate on a contingency basis where they collect a portion of the verdict or settlement as their fee and this fee usually ranges between 25% and 45% of the total award of damages to the client. If you’re into legal analysis, this FL Bar Journal article offers a fair overview of this legal debate in Florida: https://www.floridabar.org/the-florida-bar-journal/creditors-rights-under-private-annuities-and-grantor-retained-annuity-trusts-in-florida/. You also need to understand your options and why it may be too late to protect your assets from certain active creditors due to what is called “fraudulent transfer laws.”  You need to create an asset protection strategy while things are good and the sun is shining. By Phillip B. Rarick, Miami Asset Protection Attorney. Judgments can also lead to wage garnishments and other unpleasant circumstances. The techniques available to us can range from the rather simple and inexpensive to the more complicated and costly. Does an IRS Tax Lien Attach to Irrevocable Trust? Virtual Legal Services Available Statewide! The current trend in Florida is to use LLCs instead of limited partnerships because a controlling partner doesn’t need to assume unlimited liability and all of the other purposes of a limited partnership may be accomplished by allocating different “classes” of membership interest in the LLC. Call (407) 444-0404 or schedule a consultation online. Rather than addressing these 6 liability types individually, the strategies to be discussed should cover them all with some additional recommendations concerning our super-creditors, the IRS and the aggrieved spouse in a divorce action. You work hard for what you earn. The benefit of the protections offered to annuities can be significant. If you are a business professional or if you own a business, you could be hit by any of the following: 1. The most important exemption from creditors in Florida is the Florida homestead exemption. The federal government ensures the safety of these accounts to protect retirement even in case of a lawsuit. If you have collection concerns, I highly suggest you connect with someone who regularly practices commercial litigation, something we don’t get involved in at this point. Land trusts in Florida essentially convert “real property interest” into a “personal property interest” by virtue of a contract between the land trustee and the trust beneficiary. is the Managing Attorney of Gibbs Law Office, PLLC and is licensed to practice in Florida, and California. I am a 62 year old male who is disabled and only collecting SSDI. The genre of Florida trusts that are “irrevocable” and thus asset protected when they are established include the following types of trusts: The thing to know about Florida irrevocable trusts in the above list is that they are all intended for different purposes. The reasoning for heightened asset protection of qualified accounts is that they generally are for retirement purposes. The state of Florida offers 100% protection against the forced sale of a home. If you’d like to explore options for those, you can set up a 15 minute appointment on the website at no cost. On the “minimal protection” end of the spectrum, the state of Virginia only allows real property owners to exempt $5000 of the value plus $500 for each dependent or a maximum of $10,000 per married couple. You will want to consult with a licensed financial … Virtual Legal Services Available Statewide! Inheritance is not protected from creditors as an exempt asset class. Here again, the strictest protection for annuities and life insurance is found in Texas, which essentially offers total protection for these policies. Unfortunately, just as most people do not visit a doctor until they experience illness or pain, most people do not consider asset protection until they feel vulnerable to creditor lawsuits in the foreseeable future. In a best case scenario, being proactive is about taking protective measures before entering into any business contracts, loan agreements, real estate transactions or landlord-tenant agreements or any other liability producing ventures. The downside is that, in many jurisdictions, the corporation is also easier for creditors to attack because corporate stock has traditionally been subject to judgment liens and creditors have historically been able to force the sale of corporate stock in order to satisfy judgments. It is your task to determine what constitutes an asset and thus what warrants asset protection for you. So, considering what judgment creditors can do to try to get your assets, and remember that assets are defined as the stuff of ours that is either income-producing or appreciating, the next question becomes how to utilize the most effective strategies available in order to protect these assets. Asset protection is about protecting the “stuff” that you have worked so hard to accumulate. It is almost never too late for asset protection. The steps in asset protection planning include: Asset protection planning should result in knowing what is at risk and what to do about it. Asset protection works best when implemented before any legal problems are on the horizon. The property in question was an apartment complex in Ohio. Your email address will not be published. What about a manufactured home? For any marital agreement in Florida to be enforceable, a few minimum requirements should be met which are: Florida Asset Protection and Irrevocable Trusts, Florida Asset Protection and Florida Land Trusts, Business Continuity Succession Planning [An Ultimate Guide], Florida Last Will and Testament [Guidelines], Florida Asset Protection [Ultimate Guide], Florida Medicaid Planning [Ultimate Guide]. Qualified accounts that are exempt under state laws from creditor attachment include IRAs, Roth IRAs, and Keogh plans (tax deferred pension plan geared to self-employed individuals). The “somewhat obvious” reason why an asset protection plan is needed is simply that we live in a society with a legal environment that tends to favor creditors. By removing those assets from your ownership, you can protect them against creditor lawsuits. Asset Protection Trust. Enter your email address below get access to this free eBook. I will be retiring and have a choice of keeping my 401k with my company or roll it into an IRA. Asset protection planning is the process of developing a customized plan with an attorney to protect your assets from lawsuits and collection … There’s no question that the outcome of these decisions makes asset protection planning in Florida easier than ever. The generous protections provided by the Florida constitution, Florida statutes, and Florida common law make Florida one of the most debtor-friendly states in the country. In other states such as California, there are strict limits, such as only protecting up to $9,700 for an individual or $19,400 for a married couple. It is not too late to engage in some asset protection before a judgment creditor actually obtains an interest in your property by lien or execution. Therefore, Plaintiff's total damages may have to exceed $20,000 before your assets would be exposed] The exemptions that you are entitled to claim to protect your assets are listed in the Florida Constitution (homestead & $1,000 of "personal property"), Florida Statutes Chapter 222 (e.g. This is because creditors can step into our shoes and invoke your power of revocation. The original trademark owner may disagree – and sue for damages. Some state laws extend this to traditional IRAs as well. The bankruptcy chapter you choose to file will determine what will happen to any nonexempt property. Generally, my understanding is that the IRA proceeds are protected but distributions wouldn’t be. Our firm helps businesses and individuals with customized asset protection planning and implementation. Promissory notes and mortgages are usually drafted heavily in favor of the lender creditor, and any kind of legal dispute will be extremely expensive. If you live in this state, you cannot lose your annuity policy due to a lawsuit. Unfortunately, non-qualified investments like that have no asset protection. If there is a chink in the armor of Florida asset protection, the Florida LLC is it. Note, the transfer, from one insurance company to the other does not require a medallion signature guarantee. Not all creditors are bill collectors. Every state offers the ability to create an LLC in that state, and the process is essentially the same in every state, which is to file articles of organization with the secretary of that state. If “Yes” would the principal of the IRA be protected until the funds were distributed out of the IRA due to RMD rules? There are varying rules that apply to the exemption of these accounts similar to the varying state laws pertaining to homestead protection. I recommend seeking a formal litigation attorney’s opinion in Florida. Like all states, Florida has a set of exemptions you can use to protect property—such as a home, car, or retirement account—when filing for Chapter 7 or Chapter 13 bankruptcy. Grantor retained interest trusts (GRATs and GRUTS). How to Open a Tenants by Entireties Account at a Florida Bank. While trusts can protect assets from lawsuits, not every type of trust offers lawsuit protection. My Medicare Hospitalization has refused to pay the bill. Annuities can be either immediate or deferred, and the cash value is protected under most state statutes with the amount of protection varying based upon the state laws. Your asset protection strategy will depend somewhat upon the nature and value of your stuff as well as your priorities and goals. When someone … There are many other elder law asset protection strategies that may be considered on a case by case basis if Medicaid qualification is needed. Likely legal but may or may not be a good idea. For the above reasons, a Florida marital agreement can be a highly effective and important asset protection strategy, especially, in my opinion, where family fortunes and short-term marriages are involved. Date Night. Full disclosure of all assets by both spouses and a full financial statement attached to the agreement. In most cases, you cannot make changes to protect your assets if there is a lawsuit pending against you. The articles will specify some variation of who the initial “members” and “managers” are and who the “registered agent” is. If your State allows it, you can title your personal residence as “Tenants by … SIGN UP and get started today. There are some proactive things that can be done to protect one spouse’s assets from another spouse’s medical bills in FL. Generally, when operating an LLC, one should not confuse the terminology with that of a corporation, to be discussed, although some jurisdictions allow the appointment of a president and secretary of an LLC. This website contains attorney advertising. That is really is far as I can go, as any additional “advice” concerning transfers or formalities for rollovers should be handled in a 1-1 review and consultation. Medicaid trusts in Florida or income only trusts are utilized for elder law asset protection, which often focuses on keeping family assets outside of the reach of Florida Medicaid and these are subject to the 5 year look-back period for Florida Medicaid transfers. A trust is a legal entity that holds assets for the benefit of … On the contrary, asset protection is about identifying the strategies available under applicable laws that allow for the maximum protection of your assets in the event a plaintiff or other party brings a legal action against you. There is no monetary limit on the homestead exemption. Thank you for a great article and thanks for considering my question. Protecting assets belonging to a business requires a different set of asset protection tools than protecting individual assets. In general the FL homestead law would only protect the home and not proceeds from the sale thereof from active creditors. I also differentiate between “income producing” and “non-income producing” assets and this is simply a question of whether the asset is creating income for the owner. A few dollars spent on attorney fees prior to signing the agreement can save substantial attorney fees in the future. Hello Rick, sorry to hear about your situation. Various generic exemptions, such as health aids, medical savings accounts, and unemployment benefits. https://www.alperlaw.com/florida-asset-protection/florida-annuities/, http://www.assetprotectionsociety.org/pdf_files/APS.50.State.Summary.pdf, https://www.floridabar.org/the-florida-bar-journal/creditors-rights-under-private-annuities-and-grantor-retained-annuity-trusts-in-florida/, Florida Medicaid Asset Test [Managing the 5 Year Lookback], Trust Amendment [for Changing Estate Plans] in Florida, Updating Your Florida Estate Plan [the Winds of Change], Tenancy by the Entirety In Florida for Spouses, Florida Estate Planning Tips for Protecting Relationships, Smoothly Transferring Estate Assets in Florida, Planning Ahead for Trust and Estate Successors in Florida, Homestead or personal residence protection, Qualified accounts (IRAs, 401ks, and 403bs) and wage accounts, Domestic business entities (LLCs, corporations and limited partnerships), Marital agreements (pre-nuptial and post-nuptial), Domestic trusts (revocable (living), DAPTs, land trusts, other irrevocable trusts), Offshore trusts and offshore business entities, Checking accounts, savings accounts and CDs, Non-qualified investment accounts (mutual funds or trading accounts), Real property held in an individual’s name (not a personal residence), Business owned as sole proprietorship or general partnership, Personal property held in individual’s name. 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