| We live in a crazy world. You never know what's | | | | shares constitute a minority interest in the corporation. |
| going to happen. From an unexpected health | | | | Another effective strategy is to create a spendthrift |
| emergency, to a crazy lawsuit, to an unexpected firing | | | | trust. These are good for protecting inheritances from |
| from work, and 1 million other things in between; we | | | | ending up in your creditors hands. Basically you set up |
| just never know when disaster is about to strike. | | | | a trust with you as the beneficiary and somebody else |
| But you can plan ahead of time to keep your finances | | | | for instance your spouse or maybe a close friend or |
| safe from catastrophe, and that's exactly what I'm | | | | even a lawyer as the trustee. The downside here is |
| going to discuss in this article today. | | | | that you lose control of your assets to the trustee, but |
| You may be a doctor who gets sued for malpractice, | | | | you can always remove the trustee and replace them |
| you may be a business owner who gets sued for | | | | if you want. |
| some strange liability issue, you may get stuck with | | | | Another effective strategy is to simply give your |
| insanely large medical bills and find that your insurance | | | | assets to family members. It's important to do this |
| policy doesn't cover them, or you may just get fired | | | | before trouble occurs though, because if you do it |
| from your job... whatever the emergency you need to | | | | after trouble starts a judge is likely to nullify the gift. |
| be prepared before hand... | | | | There are gift tax consequences to this strategy that |
| I'm going to discuss a few strategies to protect your | | | | you will need to research in advance. Talk to your |
| assets from things of this nature. But these things | | | | CPA or tax attorney before you give any gifts to your |
| need to be applied before trouble starts, because if | | | | family members. |
| you try to apply them afterwards; they will not work. | | | | Another effective strategy is to have a life insurance |
| So here we go... | | | | policy because cash values in a life insurance policy |
| One effective strategy is to set up a family personal | | | | cannot be touched by creditors. One drawback of this |
| holding company that lets you maintain control of your | | | | strategy is that single premium annuities are not |
| major assets but at the same time transfers | | | | protected, which is something you want to keep in |
| ownership out of your name. To do this you form a | | | | mind. |
| Corporation and give yourself a majority of the stock. | | | | These are just a few examples of how to protect |
| You give a minority interest of the stock to your family | | | | your assets from a financial crisis or emergency. Sitting |
| members. Next transfer your assets to the | | | | down with a good financial planner that specializes in |
| corporation as a gift. How you allocate shares is | | | | asset protection, or an attorney who specializes in |
| important; one example is to give 30 shares to | | | | financial planning and asset protection, or even just an |
| yourself 25 shares to your spouse and 15 shares to | | | | accountant who specializes in this area is a very good |
| each of your three children for a total of 100 shares of | | | | idea for anyone with a substantial net worth, and I |
| stock outstanding. This way if somebody sues you, | | | | suggest you do so right away. |
| they can only take your 30 shares, and those 30 | | | | |