When structuring and planning any asset protection strategy, one of the more important factors is often how the asset protection entity or multiple entity structure is funded. While the funding of the structure itself is of paramount importance, one of the major factors is to create an asset protection structure that titles assets in a manner that takes the equity away from the person who is of primary risk, and whose assets are to be protected.
- A professional practice liability
- Corporate contract liability
- Audits from insurance carriers
- Matrimonial liability or some other personal exposure
We recently published a blog about protecting your personal assets from exposure when a plaintiff tries to “pierce the corporate veil.” A properly structured pension plan can further protect your assets. Certain elder planning that comes in connection with asset protection, pension structure and estate planning can also provide benefit.
Depending on how it is structured, the pension plan can act as a vehicle to:
- Protect your assets from creditors (insurance companies, vendors, malpractice, etc.).
- Save you income taxes.
- Permit a vehicle for future investments to increase your wealth tax-free.
A properly structured pension plan should take into account your practice, age and level of legal exposure to a lawsuit in order to properly meet your desired expectations.
Estate and Trust Planning
- Your assets can be given to persons who you choose and in the manner you choose.
- Elder planning can protect your assets from catastrophic nursing home costs.
In New York (and other states), courts have held that a corporation or other non-personal business entity can be “pierced” allowing a plaintiff to go after the corporation owner’s personal assets. This is referred to as “piercing the corporate veil.”
An analysis of your corporations, limited liability companies and other business entities is important to see if you are at risk for having the protections of your corporation set aside in a lawsuit, exposing your personal assets. Typically, courts have considered this remedy for a creditor/plaintiff in cases where they find the corporation to be an “alter ego” of the owner(s).