Asset protection planning is an important strategy that can be complex, yet essential to effective estate planning. Asset protection planning is simply a method of evaluating your assets and repositioning your ownership in those assets in order to effectively protect them from creditors as much as possible. However, asset protection is not a way to defraud creditors or hide assets from collection. When properly planned and implemented, an asset protection plan can be helpful both during your lifetime and after your death.
At Anderson, Dorn & Rader, Ltd., our Reno Nevada asset protection and business planning attorneys will provide you with the guidance required to successfully navigate this complex area of the law. We will examine your assets and advise you on the proper protection strategies in Reno and throughout Nevada that will help you achieve your goals and objectives.
The most effective asset protection plans should be put in place long before a claim or liability arises. If not, any transactions that occur after a claim has been made against your assetswill most likely be seenas “fraudulent transfers” which can be unwound by a court. Once you have received a demand for payment or been served with a lawsuit, it is generally too late to start an asset protection plan.
It is a common misconception that voiding a fraudulent transfer is the only consequence of late planning. The debtor,as well as the person who participated in the fraudulent transfer, typically the attorney who assisted with the planning,may be held liable for any losses and the creditor’s attorney fees. The debtor may also lose any chance of discharging that particular debt in bankruptcy as a result of a fraudulent transfer.
Reno Nevada Asset Protection Planning is not a Substitute for Insurance
Despite what some people believe, asset protection plans do not generally deter lawsuits, nor are they used to pay the legal fees required to defend against a lawsuit. Asset protection plans are not a substitute for liability or professional insurance, but instead should be used only as supplemental insurance. If you are sued, your liability insurance company should be responsible for financing your defense.
Personal Assets vs. Business Assets
Remember that trusts are used for personal assets. Whereas, business entities such as corporations, partnerships and limited liability corporations, are meant to be vehicles for business assets.
Business Planning for Nevada Businesses
Business formation and succession planning can become complicated because of the various issues involved. This is especially true for family-owned businesses. A Limited Liability Company (LLC) is usually considered the most flexible and preferred business entity. LLCs are able to combine flexible tax planning with simple administration and superior asset protection. At Anderson, Dorn & Rader, Ltd., we will assist you in determining the right entity for your situation and draft customized agreements to meet your specific needs, including operating agreements and buy-sell agreements.
The Reno asset protection and business planning attorneys at Anderson, Dorn & Rader, Ltd., can provide valuable advice on how to handle your business upon your retirement, death, or disability. Unfortunately, most business owners do not plan how they intend to leave their business. But without a comprehensive plan, your family could be obligated to sell your business or its assets after you die. Planning for your departure from your business now is an important part of your estate and retirement planning.