New York is no stranger to lawsuits. According to the NY State Unified Court System, nearly 600,000 civil suits are filed in the state each year, and that number has grown steadily over the past five years. If you find yourself at the receiving end of a civil suit, your assets are in harm’s way.
To defend your wealth against lawsuits, you need a New York asset protection attorney. These professionals set up barriers between your money and those who want to claim it.
But how exactly do they protect your wealth? Here are seven key strategies and information about how they work:
- Set Up Offshore Asset Protection Trusts
- Create Limited Liability Companies
- Develop Plans to Avoid Fraudulent Conveyance Claims
- Assist with Estate Planning
- Utilize State Laws to Your Advantage
- Layer Asset Protection Structures
- Refine and Update Asset Protection Strategies as Needed
1. Set Up Offshore Asset Protection Trusts
New York asset protection trust attorneys specialize in setting up APTs – short for asset protection trusts. These trusts are designed to defend your wealth from lawsuits, creditors, and other threats and should only be established by a qualified professional.
An APT works by creating a legal separation between you and your wealth. This separation ensures your assets are protected even when you lose a lawsuit. Creditors can’t touch your trust-held assets because the trust no longer belongs to you, in a legal sense.
The strongest asset protection trusts are set up in foreign jurisdictions with trust-friendly laws. Some notable offshore jurisdictions include The Cook Islands, Belize, and Nevis. Trusts established in these locations have a key advantage over domestic trusts — they aren’t subject to U.S. court orders. Put simply, a creditor who wins a lawsuit against you won’t have any claim to your trust-held assets.
2. Create Limited Liability Companies
Many people know that limited liability companies (LLCs) are a great way to separate their personal and business assets. However, not everyone knows where to establish an LLC. A good asset protection attorney will set up LLCs on your behalf and strategically place them in jurisdictions with advantageous LLC laws. They’ll even layer LLCs with offshore trusts to give you more protection for your assets.
3. Develop Plans to Avoid Fraudulent Conveyance Claims
Fraudulent conveyance claims are the biggest threat to an asset protection trust. These claims allege that assets were moved to defraud a particular creditor. If you lose a fraudulent conveyance case, your creditor can forcibly claim any of the assets within a domestic asset protection trust.
So, an experienced New York asset protection attorney will typically recommend an offshore asset protection trust that is virtually immune to claims of fraudulent conveyance.
4. Assist with Estate Planning
Asset protection goes beyond keeping your wealth safe while you’re alive; it also includes making plans for when you pass on. An asset protection attorney in New York creates inheritance plans that ensure your wealth goes to the right people.
Estate planning involves leveraging trusts – the same ones used in asset protection. They can protect your wealth during your lifetime and then be passed on to your beneficiaries. After that happens, your heirs can also be protected from lawsuits.
5. Utilize State Laws to Your Advantage
If your attorney is clever, they’ll use New York’s laws to defend your assets. For example, New York has a homestead exemption that protects a person’s primary residence from being seized by creditors. The amount of protection varies by county. One can use this exemption to defend up to $359,900 worth of home equity.
An asset protection attorney can determine if this exemption could be a useful part of your broader wealth preservation plan, depending on your location and risk exposure.
6. Layer Asset Protection Structures
New York asset protection attorneys layer tools to make wealth preservation strategies stronger than the sum of their parts. The most common example of tool layering is combining an offshore trust and an LLC. Here’s how that’s done:
- The attorney will first establish an offshore trust.
- They will set up an LLC, typically in the same offshore jurisdiction.
- The trustee makes the trust a member of the LLC.
Once this process is complete, the trust’s creator can initially manage the LLC. The creator (settlor) of the trust is also typically a beneficiary of the trust. This strategy allows you to closely manage your trust without putting your assets at risk. When under legal attack, the trustee company can step in as LLC manager, putting your assets beyond the reach of the local courts.
7. Refine and Update Asset Protection Strategies as Needed
Laws change constantly, and financial laws are especially prone to change. When these laws are updated, they can render parts of your asset protection strategy ineffective. If your strategy isn’t compliant, it could backfire and put your assets at risk.
Fortunately, your attorney’s job isn’t over the day your trust is established. They will continually monitor the laws in your chosen jurisdiction. Whenever changes threaten your strategy, they’ll make any necessary updates.
Work with a New York Asset Protection Attorney from Asset Protection Planners
It’s time to stop worrying about lawsuits, creditors, and other threats to your wealth. Give Asset Protection Planners a call. Our asset protection attorneys have decades of experience helping people keep their hard-earned wealth safe.
Don’t wait until you’re sued. Get the protection you need before a problem arises. Click the button below to schedule your free consultation today.
