If you are starting a business, you should prioritize asset protection. Our asset protection attorneys can help you understand your options and formally establish the structure that is right for you. By taking the correct steps, you can separate your personal assets from your business debts and go forward with total peace of mind.
Limited Liability Companies
One frequently used business entity providing asset protection is the limited liability company. This entity can be set up as a pass-through tax entity. This means that profits and losses flow through to the LLC owner or owners and reported on individual tax returns. The simplicity of pass-through taxation is one of the appealing aspects of a limited liability company.
In most cases, the owners of the business are not personally responsible for debts that are incurred by the LLC. However, there are a handful of exceptions.
For example, if an LLC owner takes out a loan and personally signs the note or is a guarantor of the note, there is no protection against that obligation. Assets outside of the LLC would be exposed if the owner personally and directly injured someone. The owners would also be responsible if their fraudulent or illegal acts damaged the company.
Family Limited Partnerships
Another very effective asset protection tool used is the family limited partnership. Although the limited partnership vehicle can be used by unrelated parties, as the name would suggest, partners are often members of the same family. A limited partnership is comprised of a general partner and limited partners. In a limited partnership the general partner has sole decision-making authority.
The best way to explain how a family limited partnership works is to provide an example. Let’s say that you own an apartment building. Rather than leaving it in your own name, you could convey the building into a family limited partnership.
If someone who is injured on the property files a lawsuit, your own personal assets would not be exposed. Conversely, if you are personally sued for some reason, the plaintiff could not seek to attach the apartment building.
Business Liability Insurance
Though the LLC and limited partnership are very effective asset protection vehicles, you can include added layers of protection when you are devising your business asset protection strategy.
General liability insurance or an umbrella policy will protect you against personal injury suits, advertising claims, and property damage claims. Professional liability insurance is another type of coverage that can be useful for many businesses and professional practices. It can provide protection from legal actions that can stem from errors or omissions. Product liability insurance is another type of coverage that some businesses should carry.
Nursing Home Asset Protection
The term “asset protection” usually applies to business entities. If you are a local Oklahoma City business owner or investor, we can help you keep your assets safe and sound. At the same time, since our firm specializes in estate planning and elder law matters, we often help clients implement a different type of asset protection strategy.
The majority of senior citizens will qualify for Medicare when they reach the age of 65. Since this government health insurance program is designed to address the needs of elders, you may assume it would pay for nursing home care. In fact, Medicare does not cover nursing home costs.
Here in Oklahoma City, the average annual charge for nursing home care is just over $65,500. It is not uncommon for people to spend multiple years receiving nursing home care. If you have to pay the nursing home out of your own pocket, the costs could consume your children’s inheritances.
This is why nursing home asset protection is so very important. Medicaid is another government health insurance program that will pay for nursing home care if you can gain eligibility. You cannot qualify for Medicaid if you have more than $2,000 in countable assets. There is also a monthly income limit you cannot exceed.
However, with the proper planning, you can divest yourself of direct personal possession of your assets at the right time. You can use a Medicaid trust to accomplish this goal. We can help you take the right steps to protect your legacy as you aim toward future Medicaid eligibility.
Schedule a Consultation Today!
If you would like to speak with an Oklahoma City asset protection attorney, give us a call at 405-843-6100 to set up a consultation. You can also send us a message if you would prefer to get in touch electronically.
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.