Plans


Posted on September 25th, by WebMaster in Blog. No Comments

Asset Protection is not too different than life itself. It can grind you into the dust, or it can be a breeze—all of that depends on how much work you put into both. If you want to strengthen your Asset Protection, get a plan. You might need an example of that, so let me describe to you a little situation I recently had: yesterday, a client rang me up. He was in a whole heap of trouble, you see, as he had just figured out he owed $600,000 to the IRS thanks to bungled taxes.

That is one large amount of money—I don’t have to tell you that—to owe, but my client kept his calm. The client was sorry for his mistake and wanted to give the IRS their fair share, but he needed to be able to do that at his own pace. So he came to me for advice. What I ended up asking him was, “Do you have any planning in place?” Silence came over the phone.

He had no protection. We would need to start from the beginning.

That was just the start of his issues. My client had a well-off grandfather who planned on bequeathing him a large package in the will once he passed; about $1 million, to be exact. Due to the grandfather’s failing heart, my client was within a year of claiming this inheritance. But when he told his grandfather how he owed the IRS $600,000, the grandfather did not take it well. He cut my client from his will.

Too bad my client didn’t have an Asset Protection Plan in place to guard that $600,000.

Flawed Plans

Now let me interrupt myself to provide a bit of information here. Most estate plans you will see are actually flawed estate plans. No matter what is in place—be that trust, or what have you—to protect, once the Father and Mother pass on then Son and Daughter will plainly get the assets. Mother and Father might split the inheritance a dozen ways, but it hardly matters.

See something wrong with that picture? I certainly do.

What is wrong is that if your children have a judgment placed on them, then their Judgment Creditor will retain equal rights to the inheritance. Whatever Son and Daughter can do with your inheritance, so to can the Judgment Creditor; in almost every case, this leads to the Judgment Creditor seizing those assets, leaving your Son and Daughter with a big amount of nothing.

Imagine that you are married to money-hungry spouse and you are willed a million dollars. What happens when she decides to divorce you?

She takes the money.

Rewind back to my client and his grandfather. If the grandfather had willed him $1 million outright but the IRS has a bill for him for $600,000, who is paid first? Answer: The IRS.

Fixing Your Plan

So now that we realize the problem in unprotected assets, how can we protect ourselves; surprising with a stunningly easy fix.

What I would instruct my client to do is to have his grandfather deposit the assets in a trust for him. In the trust, my client will be listed as a beneficiary. That means my client would be able to direct investments and use the assets for his benefit, like purchasing a new condo or paying off that $600,000 at his own pace.

Another that you should know about is structure. Just like with a house, there is a right way and a wrong way to set up a trust structure. Most people will inform you that setting up a trust will protect you in and of itself; this not so! You need to structure the trust so that is strong and tight, as discussed above. For more individual help with that, contact a professional and if you need legal advice contact an attorney. But, before you spend thousands of dollars on Attorneys and professionals buy my book and read it Asset Protection Manual By: Michael Ioane

What Have We Learned Today?

Do not—I repeat, do not—set up assets to be handed on outright. Get a trust, and make certain that you get agood trust. Otherwise, you might be looking down from heaven with a frown as you witness your son have his inheritance devoured by the IRS instead of vacationing in the Bahamas; By Michael S Ioane.

Have a Plan

My closing advice for you is simple: have a plan, and buy the Asset Protection Manual

Will you be receiving an inheritance? See if the people who are leaving you it would do so in a trust. They might find it extra trouble at first, since they will need to talk to their lawyers again, but isn’t it worth it in the end? Tell your benefactor that you would rather receive their gift than a creditor on the hunt.

Similarly, be absolutely certain that you have an estate plan and that that estate plan never leaves inheritance outright. Always have your assets wrapped in trusts for protection before they go to your beneficiaries.

Above all, be certain that everything is following your plan. Make certain that the pieces of this plan fit together coherently. Talk with a professional for advice on the plan, if you haven’t already. You need your plan to be as beneficial as possible, so that you can hold onto your assets—so you can hold on to your life.

Have any questions? Feel free to drop a comment on this post or e-mail me.

Teri Norgrove, Author





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