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Monday, 11 August 2014

How Should Asset Protection Trusts Be Conducted

By Tanisha Berg


Creating wealth and acquiring assets requires hard work and takes time. However, at times, you may be faced with lawsuits that risk your personal wealth. It is essential you consider seeking asset protection trusts to safeguard your wealth. Some professions and individuals may be more likely to encounter increased risk of being faced with lawsuits than others. If you are an entrepreneur or a corporate board member, you could find yourself in lawsuits that demand you surrender your assets.

In treating patients, doctors can make mistakes, which amount to negligence act thus attracting lawsuits. Such lawsuits founded on medical negligence can be quite costly. If you operate a clinic or own your property, you may risk such assets to creditors like patients who have launched lawsuits against you.

When a creditor seizes your business through a legal means, you may lose the stock and the equity of the entity. You may need to talk with your lawyer about any claims or lawsuits that could lead to repossessions of your property. The lawyer will be able to advise you on the right course of action to take.

If you are faced with a lawsuit, you may find yourself losing your wealth. Professionals such as doctors might make mistakes, which plunge them into lawsuits. The lawsuits may range from those related to negligence acts you have indulged in like causing an accident to those related to foreclosure of a home, which you have not been paying the mortgage advanced to you.

Sometimes, when you try to enter into trusts arrangements when there is a pending case in court, it may be seen as depriving the creditor the ability to access your assets. This could easily be noticed by the court and possible reversal of the asset protection procedure may be ordered. In planning for your assets protection, you ought to understand that some of the clauses such as the spendthrift are irrevocable.

Since the trustee holds the legal title for the property, it may not be easy for creditors to go after it whenever lawsuits ensue. Although a trustee is given the mandate to hold the legal title of your property, you and other designated beneficiaries retain the beneficial title. The trustee on the other hand is legally obligated to observe the terms that have been created based on the applicable law.

The original owner of a property acts as the grantor and the trust should allow him or her to direct an investment featured in the trust to receive principal or income as well as veto distributions to other parties that are disclosed in the arrangement. Besides, the grantor may also retain some power to allow them distribute their assets through what is referred to as limited power of appointment during the time of death.

But, if you made a sound decision early in advance and protected the business assets, you are able to keep away the creditors from acquiring them through legal means. In most cases, uncertainties strike when you least expect them and for you to ensure you are not caught up unawares, you should make sure you consider protecting your assets through trusts. The best time to do that is not when there are no lawsuits launched against you.




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