Getting married is a legally binding contract. As part of that contract many couples choose to sign Prenuptial Agreements. These agreements enable both parties involved in a marriage to protect their assets and in family investments that may be passed along through generations.
Offshore trusts continue to be an effective asset protection tool in bankruptcy, tax litigation, and divorce situations, even when the facts are not favorable to the trust grantor. Problems may develop if you don’t retain the legal counsel of an asset protection attorney. The catch is that you might have to face time in jail for contempt of court before you are reunited with your money.
Could joint tenancy, one of the most common forms of holding title to assets, lead to an estate planning disaster for your heirs? Joint tenancy, often called “joint tenants with right of survivorship,” is a form of holding equal interests in an asset by two or more persons. If one joint tenant dies, his or her share generally passes automatically to the other joint tenant(s) by right of survivorship.
In North Carolina, standard IRAs are exempt from creditors’ claims under state law and federal bankruptcy law. Also, qualified retirement plans, such as 401(k)s and 403(b)s, are protected under the federal ERISA law.
The most effective asset protection requires proactive planning. Many people seek an asset protection attorney to explore options only after some type of actual or probable liability has arisen. At that time it may be too late to employ any meaningful asset protection, as most contemplated transfers of property could be undone as a fraudulent conveyance.
How does your state law define property? The protection of assets in bankruptcy may hinge on the presence of a simple disclaimer. In a case interpreting Arizona law, the Court of Appeals for the Ninth Circuit held in Gaughan v. Costas that a disclaimer filed prior to declaring bankruptcy was valid and effective since the disclaimer was permitted under state law. In re Costas, 555 F.3d 790 (9th Cir. 2009). The effect of the ruling is that federal courts must examine state law definitions of property to determine whether a disclaimer of an interest in a trust or estate constitutes a fraudulent transfer under the Bankruptcy Code. Learn More