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Moorestown NJ Asset Protection Attorney

Our New Jersey Attorneys Can Help You With Estate And Asset Protection.

Have you ever worked hard to build a successful life, only to worry about losing it all due to a lawsuit or unexpected financial burden?  Many people don’t realize that unexpected events, from business ventures gone wrong to personal accidents, can threaten their financial security.  This is where asset protection comes in.

Asset protection is like putting on a financial shield. It’s a way to safeguard the things you’ve worked hard for,  like your house, savings, and retirement accounts.  This can be important in many situations, such as:

  • If you own a business and get sued by a customer.
  • If you’re in an accident and someone tries to sue you for damages.
  • If you’re going through a divorce.
  • If you have a child with special needs who may need financial assistance in the future.

By planning ahead with asset protection strategies, you can ensure your financial security and peace of mind.

Quick Summary:

  • What is Asset Protection?
      • Asset protection means taking steps to protect your belongings, like your home, savings, and retirement funds, from unexpected problems and legal issues.
  • Why is Asset Protection Important?
      • Asset protection is vital for situations like lawsuits, financial emergencies, divorces, and securing the financial future of dependents with special needs.
  • Common Asset Protection Strategies:
    • Irrevocable Trusts: Transferring assets into an irrevocable trust can shield them from creditors and lawsuits, offering strong protection for beneficiaries while potentially qualifying for government benefits.
    • QPRTs (Qualified Personal Residence Trusts): QPRTs are tailored for primary or vacation homes, allowing you to retain residency while reducing estate taxes on the property’s appreciation for your heirs.
    • QDOTs (Qualified Domestic Trusts): Ideal for couples with one non-U.S. citizen spouse, QDOTs protect assets from estate taxes and ensure financial security for surviving spouses and future generations.
    • Land Trusts: By transferring real estate ownership to a trustee, land trusts offer privacy benefits, potentially deterring lawsuits and simplifying probate processes, though they may not protect against all claims or suit all real estate transactions.

What is Asset Protection?

Life can be unpredictable.  Even with careful planning, unexpected events can arise that threaten your financial security.  Asset protection is a proactive approach to safeguarding the things you’ve worked hard for,  like your house, savings, and retirement accounts. 

Why is Asset Protection Important?

There are many reasons why asset protection is important. Here are a few common situations where it can provide valuable peace of mind:

  • Lawsuits: If you own a business or are in a profession with higher risks, a lawsuit from a customer or client could put your personal assets at risk. Asset protection strategies can help shield your personal property from being seized to pay a judgment.
  • Unexpected Events: Accidents, injuries, or sudden medical bills can create a significant financial burden. Asset protection can help ensure you have the resources you need to weather these storms without jeopardizing your long-term financial goals.
  • Divorce: During a divorce, assets are divided between spouses. Asset protection planning can help you ensure a fair division of property and protect assets you want to keep, especially if you have separate assets brought into the marriage.
  • Planning for the Future: If you have a child with special needs, you may worry about their financial security after you’re gone. Asset protection strategies can help ensure they have the resources they need while still qualifying for important government benefits.

By taking steps to protect your assets now, you can ensure your financial future remains secure, no matter what life throws your way.

What Are The Common Asset Protection Strategies?

Taking steps to protect your assets, investments, and resources from danger is asset protection. To secure your valuables, try these typical methods:

Irrevocable Trusts

An irrevocable trust is a legal arrangement where you transfer ownership of assets to a trustee (another person or institution) who manages them for the benefit of beneficiaries you designate (often children or loved ones). Once assets are placed in an irrevocable trust, you generally give up control of them.

  • How it Protects Assets: Since you no longer legally own the assets in the trust, they are typically shielded from creditors and lawsuits filed against you.
  • Who It’s For: This works well if you have a lot you want to leave to loved ones (like kids or grandkids) and want to make sure it’s protected from lawsuits or creditors. It’s also helpful for parents with special needs children to safeguard benefits they might qualify for.
  • Pros: Strong asset protection, ensures assets go to intended beneficiaries, can qualify for some government benefits.
  • Cons: Loss of control over assets, generally cannot be revoked or changed once established, may have tax implications.

QPRTs (Qualified Personal Residence Trusts)

A QPRT is a special type of irrevocable trust designed for your primary or vacation home. You transfer ownership of the house to the trust, but get to keep living there for a set period (usually 2-10 years). After that time, the house goes to the beneficiaries you named in the trust (often children).

  • How it Protects Assets: The value of your home’s appreciation during the trust term is generally removed from your estate for tax purposes. This is because the IRS uses a low-interest rate to calculate the value of your remaining interest in the house, reducing the overall taxable value.
  • Who It’s For: This strategy is best for homeowners who want to pass their house to heirs at a reduced estate tax cost. It can be particularly useful if you expect your home to increase significantly in value.
  • Pros: Lowers estate taxes on your home, keeps you living in the house for a set period.
  • Cons: You give up ownership of the house after the trust term, may not be suitable if you plan to live in the house longer than the trust term, has some tax filing requirements.

QDOTs (Qualified Domestic Trusts)

A QDOT is a special trust for married couples where one spouse is a U.S. citizen and the other is not. You transfer assets to the QDOT, which benefits the non-citizen spouse while alive, but ensures the assets stay protected and eventually go to your chosen beneficiaries (often children).

  • How it Protects Assets: By placing assets in a QDOT, they are generally shielded from estate taxes if the non-citizen spouse dies first. This is because the assets technically aren’t considered part of their estate.
  • Who It’s For: This strategy works for married couples where one spouse is not a U.S. citizen and they have a large estate that might be subject to estate taxes. It helps ensure the surviving spouse is cared for while protecting assets for future generations.
  • Pros: Saves on estate taxes if the non-citizen spouse dies first, provides income for the surviving spouse.
  • Cons: Only applies to married couples with one non-citizen spouse, involves complex trust rules and tax filing requirements, and may not be correct for all situations.

Land Trusts

A land trust is a legal arrangement where you transfer ownership of real estate (land or buildings) to a trustee who holds the title on your behalf. You, as the grantor, still control the property and enjoy its benefits, but the ownership is hidden from public records.

  • How it Protects Assets: A Land Trust keeps the name of the real owner of a property hidden from public records. This makes it harder for someone looking online to see what real estate you own. This can be helpful if you’re worried about lawsuits or just want to keep your personal information private.
  • Who it’s For:  This works well if you’d like to keep your real estate ownership private or are worried about lawsuits coming after your property. It can also make things easier when passing it on to heirs.
  • Pros: Offers some privacy for property ownership, can simplify probate in some situations.
  • Cons: Doesn’t necessarily protect assets from all claims (like those with existing liens), may have some ongoing costs associated with maintaining the trust, may not be suitable for all types of real estate transactions.

Our Attorneys Offer Flexible Fee Arrangements For Estate Planning And Asset Protection. Call Us For A Consultation Today.

Do you need help protecting your stuff?

Whether you have a few savings or run a business, an asset protection lawyer in Moorestown, NJ can help you figure out what you own and how to keep it safe.

Posternock Apell, PC can help!

Our experienced attorneys, Robyn Goldenberg and Dan Posternock, will work with you to create a plan that fits your needs. We go beyond just wills and estates, and we offer affordable options.  Our services include real estate, litigation, and employment law to address our clients’ personal and professional lives.

Our lawyers have years of experience dealing with all sorts of asset protection issues, from figuring out what your stuff is worth to setting up legal plans to keep it safe.

Ready to talk?

Contact Posternock Apell, PC today for a consultation. We can help you protect your assets and plan for the future.