In order to protect your assets you should create a lifetime plan that includes asset protection. Your lifetime plan should include 1. how to maintain your current lifestyle (and spouse’s, if married) 2. how to deal with inflation 3. succession planning if you have a business 4. what if one of your kids gets divorced 5. how to protect you and your spouse 6. how to protect your kids and grand-kids (if any) and 7. a host of other issues that are unique to every individual.
How to protect you and your spouse
1. Your residence(s): transfer to a “qualified personal residences trust” or hold title 50 percent in your revocable (estate planning) trust and 50 percent in your spouse’s trust.
2. Other real estate you own should be in a separate LLC, unless they are not very valuable.
3. Investments (cash/stocks/bonds/CD’s/interest in LLC) should transfer to a family limited partnership (FLIP)
4. Do NOT co-sign or guarantee loads for friends or family unless you’re considering it a gift and are expecting to pay for it.
5. Cars, Cars, Cars – Don’t do any of these things or you may find yourself in hot water.
a. Don’t own a car of an adult child.
b. Don’t own vehicles jointly with your spouse.
c. Don’t let other people drive your car unless your insurance has proper coverage.
6. You and your spouse must maintain property powers of attorney.
How to protect your kids and grand-kids
1. Never leave property to a minor. Instead put into a trust, to a FLIP or some other protection device.
2. Beware of divorce. – Don’t have your grown up children own life insurance policies on your life and give your children limited units in the FLIP.
3. Sometimes people need to be protected from themselves and that occasionally can be your children. If your child is spending money on drugs, has special needs, etc., set up a trust that fits you and your child’s needs.