Asset Protection Planning in New York

Asset Protection Planning in New York

Asset Protection Planning

Asset protection planning seeks to protect a person's property from the claims of future creditors. You should be concerned with asset protection planning, if you are a professional, executive or small business owner. It makes litte sense to construct a comprehensive estate plan and then lose a significant part or all of the assets yuou have accumulated over a lifetime to a litigation judgment. Yet, that is what too-frequently happens in this litigious society. Reason: If an individual owns a small business as a sole-proprietorship or general partnership, all of his personal assets are put at risk to a potential claim of creditors. Most small businesses will be forced into bankruptcy from a single lawsuit. Likewise, a corporate executive who has accumulated stock, real estate, and bank accounts in his own name can lose it all in the split-second of an automobile accident.

Asset protection planning is designed to prevent these disasters. What techniques are used to accomplish this purpose depend on the unique facts of each case. The solution could be as simple as purchasing the right liability insurance. Or, it may involve the incorporation of a small business, or the transfer of financial assets to a family limited partnership. If appropriate, it could require an “Asset Protection Trust” in Delaware, Connecticut, or Alaska. (See important news below) Trusts established in these jurisdictions each have their own benefits and drawbacks. We analyze the client’s assets, and his business and lifestyle to arrive at a plan that is suitable and effective for the client and his or her family. Then we draft the necessary documents, form the business entities, transfer assets and fund trusts to bring the plan to life.

Planning to protect a client's assets from the claims of future creditors is an important part of comprehensive estate planning. The Index of Estate Planning Practice Areas below is a portal to estate planning practice topics and articles. We work with our clients to integrate the protection of their asset within a comprehensive estate plan.

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News -- Is the Door Open to Asset Protection Trusts in New York?

A recent case may have opened the door to asset protection trusts in New York. The property in question was placed in a living trust while the grantor was solvent. But, at the time of his death, the grantor left an insolvent probate estate. So, a creditor of the grantor was trying to reach the property in the trust to satisfy her claim. The key to the case was that the assets were life insurance proceeds and certain other assets. The court held that these assets were exempt from the claims of creditors after the grantor's death.

We have been studying this case and believe that under the proper circumstances a trust can be created in New York that will withstand the challenge of creditors. Please call us for an appointment to discuss this opportunity in greater detail and whether you may be able to establish a trust with your assets that may withstand such challenge.

Copyright © 2003 STEPHEN C. SILVERBERG, PLLC All rights reserved.
Last modified: October 11, 2003

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Law Office of
Stephen C. Silverberg, PLLC

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