Asset Protection
There has always been a debate over whether it is proper to help clients in asset protection planning, and whether clients should morally do it at all. On one side, why not protect your assets from unforeseen circumstances, or potentially frivolous lawsuits? People engaged in high-risk professions (physicians, etc.), or those who are inevitable targets (celebrities, athletes, the newly wealthy, etc.) should have a right to protect themselves from the world at large and the general litigiousness of society. On the other side, these actions could stop legitimate creditors from obtaining assets that society might feel are rightfully theirs by way of a valid legal process.
The Florida Uniform Fraudulent Transfer Act (FUFTA) provides the framework for the moral debate, separating (in general) certain actions you can do legitimately when dealing with either present or future creditors. The best planning is done before creditor problems exist, so it's always best to start early. Once you have creditors at your doorstep, your options become much more limited.
There is a litany of entities and methods people can use to legitimately protect assets. Business owners can choose from the Corporation, the Limited Liability Company (LLC), the Limited Partnership (LP), the General Partnership (GP), the Limited Liability Partnership (LLP), and the Limited Liability Limited Partnership (LLLP). Tax issues and creditor protection vary among the entities.
Those who are disabled and infirm, or their relatives, can explore the options of Medicaid Trusts, used to protect small nest eggs from the hands of the government when Medicaid has assumed or will assume the cost of their care.
The wealthy can protect their children from their own excesses through the use of a spendthrift trust. Finally, the Local or Offshore Asset Protection Trust can be used, mainly by the wealthy, to protect assets from overreaching future creditors. A few of the advantages of the Offshore trusts: U.S. judgments are not recognized, the creditor must utilize a local lawyer, no contingency fees are permitted, the creditor must post a bond, and the standard of proof in establishing fraud is usually "beyond a reasonable doubt." There are also Asset Protection Trust laws available in Alaska, Colorado, Delaware, and Nevada, with slightly differing variations.