Asset protection involves strategies for insulating your assets from creditors and other parties, while staying in compliance with laws that prohibit fraudulent transfers and concealment. The underlying concepts have become well-recognized as a distinct area of law, but asset protection methods are typically implemented in connection with other components of planning. Most often, individuals will seek to safeguard their property in the context of divorce or estate planning.
There’s a wide range of asset protection structures available under US and Texas law, which is why it’s wise to work with skilled legal counsel. You put your property and rights at risk by attempting to go it alone, since you could lose that which you seek to protect AND subject yourself to criminal sanctions. Our team at Hargrave Law, PC has extensive experience and meticulous knowledge of the relevant laws, so we’re ready to implement planning mechanisms to protect your interests. Please contact our office to schedule a consultation with an asset protection lawyer today. You might also find it helpful to review some general information.
Protecting Your Assets Through Integrated Estate Planning
Many people focus on the post-death aspects of estate planning without realizing that there are components that deliver benefits before your passing. When properly integrated with estate planning, asset protection can guard your wealth from creditors, taxation, seizure, or other forms of forfeiture.
The objective is to make your real and personal property unreachable without compromising it under the Texas Fraudulent Transfer Act. To achieve your goals, you’ll need to implement effective strategies long before your assets are overshadowed by the potential claims of creditors. The specifics will depend on your circumstances, and our attorneys at Hargrave Law, PC can advise you on such options as:
- Asset Protection Trusts: With this structure, you’re a beneficiary who can receive income and/or interest from trust funds. However, the trust must be revocable so that you have no control over management. There are various reasons you might consider a domestic or foreign asset protection trust.
- Limited Partnerships: Through this option, you can protect assets owned by the entity from amounts you personally owe to creditors. Your debt must be completely separate from the partnership’s activities for the property to be protected. Note that a creditor can still collect from the income you receive from the entity.
- Retirement Plans: Plans covered by ERISA are protected from creditors under federal, while state law does safeguard some IRAs.
- Jointly-Held Property: Though there are some drawbacks, it’s possible to protect assets through titling them in joint tenancy. Keep in mind that Texas does not recognize a form of ownership known as tenancy-by-the-entirety between spouses.
Asset Protection in Divorce
There are two methods for safeguarding your real and personal property when divorce. A prenuptial agreement you execute before your wedding date and a postnuptial agreement once you’re already married. Texas law is strict on the requirements for preparing these documents, which must:
- Be in writing;
- Be signed by both parties voluntarily, after full disclosure of all debts and assets;
- Not be unconscionable, i.e., extremely unfair to one spouse; and,
- Comply with other legal requirements.
Trust a Texas Asset Protection Attorney for Guidance
From this overview, you can see that asset protection is more than simply transferring ownership of assets into someone else’s name. You could run afoul of state and federal statutes, which could lead to a reversal of transactions and criminal liability. To learn how our lawyers can assist with a solid asset protection strategy in estate planning, divorce, or other circumstances, please contact Hargrave Law, PC at 817-282-0679 or via our website. We can schedule a consultation to discuss your options at our offices in Bedford, Carrollton, or Grapevine, TX.