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Asset Protection and Wealth Preservation

Most of us see the benefit in buying homeowner’s insurance, automobile insurance, umbrella insurance, and other forms of liability coverage.  We like the peace of mind that the coverage provides.  However, for many wealthy clients and high-liability professions such as physicians, lawyers, business owners, and executives, the exposure to potential lawsuits, judgments, rocky marriages, and the like present vulnerabilities that insurance may not fully cover—if at all.

You have worked hard for what you have accumulated, and most often you want that wealth to be preserved and be passed to spouses, the next generation, or charities with as little tax and as little liability exposure as possible.  What other steps should be taken to see that those goals are achieved and risk is minimized?   For many, the answer is to employ asset protection and wealth preservation techniques.  Such techniques include:

  • Insurance
  • Limited liability companies
  • Domestic Asset Protection Trusts (“DAPTs”)
  • Gifting strategies to spouses and other family members
  • Prenuptial and Postnuptial Agreements
  • Retirement plans (IRAs, 401ks, etc.)

We have assisted high net worth clients, including physicians, business owners, and executives with evaluating, implementing, and employing these when there are no threats of litigation pending or on the horizon.

Specifically, we like to educate such clients about DAPTs as a method to provide insulation from unknown future claims.  While all other types of irrevocable trusts require clients to give up benefit and control over assets transferred to the trusts, DAPTs are established in one of the several state jurisdictions that allow creators of the trusts to be beneficiaries of the trusts if certain conditions are met.  These laws offer increased asset protection while also making the assets easier for the client to access if the need arises.  There are also alternative versions of DAPTs—often referred to as Hybrid DAPTs—where a client creates a third party trust or series of trusts for spouses, children, or combinations of the two, and the trusts can include a provision whereby an independent third party can later add the client to the trust as a permissible beneficiary.   While there are risks in the creation of DAPTs, they can serve as excellent options for many high net worth/high liability risk professionals.

Take the first steps to discuss your options and call our office at 770-450-4480.