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Asset Protection is a State-of-Mind – How to Get into this Mindset

By Howard C. Stross
June 30, 2015

Asset protection is a state-of-mind and a way of life. It is not a one and done situation. Asset protection must be continually and consistently maintained. Many people fail to appreciate this, and see their property, money from life insurance, money to a beneficiary from an IRA, a 401k or other valuable asset lost or diminished because they failed to make the lawful protection of those assets a priority in their lives.

One of the most important aspects of this asset protection state-of-mind is the awareness that to properly protect assets from unexpected circumstances, the assistance of more than one professional may be needed. There is often special knowledge required, with many precise legal requirements involved in the preservation of your assets and your property. The advice you receive should be objective. It is difficult to be objective with one’s own assets. Yet, objectivity is important to have when you wish to protect assets.

If you want to do everything legally possible to protect assets—which is what the asset protection state-of-mind involves—the help of an experienced asset protection attorney is necessary. Depending on your circumstances, asset protection may require a team of professionals, such as an experienced asset protection attorney, a CPA, financial advisor and insurance professional.

Here are two common examples of people with the best intentions who lost their most important assets through lack of knowledge and professional assistance. Don’t fall into a false sense of confidence that your assets are protected when in fact they are not. Call us today at 813-852-6500 for a free consultation. We can help.

The first example of how a false sense of asset protection created an unexpected outcome involves two professionals who lived together for decades without being married. They purchased a home together. In the real estate documents they were tenants in common. They thought this meant when one of them died, the other would receive their home as its surviving sole owner. Unfortunately, they were mistaken. When she passed away without having made a will, her interest in their home went to her brother after the probate of her estate. The result was the survivor was forced to leave his beloved home. If they had received the proper advice and made a joint tenancy with full rights of ownership to the survivor, or they had created a trust, he would have received her interest in the property as she intended, and he would have then remained in the home as its only owner.

The second example of how a false sense of asset protection created an unexpected outcome involves two professionals that did not live together. They were co-owners of a successful business with about 150 employees. Each owned 50 percent of the business, which was valued at about $5 million. They had a terrific business plan and took the actions needed to implement it. What they failed to plan out was what would be done with the business if one of the partners became mentally or physically incapacitated for more than a temporary period. Murphy’s Rule, sadly, has not been repealed:  What can happen will or may happen, and it always happens while you are busy making other plans and taking other actions. One partner became mentally incapacitated with no hope of regaining his mental capacity. In a court proceeding, two formal guardianships were established with two separate, professional guardians appointed. One guardian was to oversee the property of the incapacitated person. The other guardianship was to take care of the incapacitated man’s physical person. Educating the guardian of the business while it was in operation was challenging, time consuming and expensive. After the guardianships, the business did not fare well and had to be sold.

Proper asset protection requires awareness of its importance, combined with professional advice and the active involvement of the owner of the assets. Do you want to protect assets? If avoiding unfortunate circumstances such as those exemplified in this article is your goal, contact us at 813-852-6500 to schedule a free initial consultation. We can help you achieve your goals.

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