Six Things You Should Know About Texas Asset Protection
Asset protection refers to ways to both protect and preserve your assets from collectors as well as other entities who might attempt to spend these funds. After all, regardless of how well you plan or how bright the future looks, various events like bankruptcy, divorce, loss of employment, and lawsuits can unexpectedly deplete your assets.
Texas state law provides a variety of protection for certain types of assets. In many situations, these include a person’s homestead as well as a certain amount of personal property, life insurance, retirement accounts, and savings accounts. Other “non-exempt” assets enjoy various types of protection through the use of legal structures including family limited partnerships, limited liability companies, and irrevocable trusts.
This article reviews some of the important details you should understand about trusts as well as other strategies to protect your assets from adverse events. Contact your trust asset protection lawyer in Dallas for additional information and guidance.
How Trusts Can Provide Asset Protection
Utilizing trusts to guard assets is one of the most common protective techniques. Certain types of irrevocable trusts exist where a person can be the trust’s creator as well as the beneficiary. After transferring assets to the trusts, however, the assets are managed by a third-party trustee and are no longer owned by the trust’s creator. Despite relinquishing ownership, the trust’s creator still receives benefits from these assets and can control as well as manage them indirectly through the trustee. Some of the most common types of trusts that can be utilized to protect assets from the threat of creditors or lawsuits include:
Utilizing Limited Liability Structures
Besides creating a trust, another powerful way to protect assets and guard from liability is to create a limited liability business structure. Limited liability companies (LLCs) exist as separate legal entities in which the owner is not personally liable for claims made against the business. If some lawsuits or liabilities arise from a business operation, an individual’s personal assets will be protected and consequently cannot be seized by creditors. Consult with your trust asset protection attorney in Dallas for more details on whether this structure is the right vehicle for you. https://www.sos.state.tx.us/corp/
Many employer-sponsored retirement plans are protected by federal laws and are also frequently exempt from bankruptcy, which means that a person can retain these accounts even after filing for bankruptcy. These accounts are also better protected than ordinary personal assets are from creditors.
Texas’s homestead protection laws help individuals retain ownership of their homes in case of bankruptcy or financial hardship. In the state of Texas, each family as well as every single adult individual is entitled to a homestead exemption from creditor seizure with the exception of pre-existing liens or mortgages. Homesteads can involve either rural or urban property. Urban homesteads can be either homes or places of business. A homestead can be a separate structure, condominium, or manufactured home located on owed or leased land, as long as the person living in the home owns it. It can include up to 20 acres. How a homestead is classified can impact issues like the amount of acreage subject to a homestead exemption as well as whether the property can qualify as a business homestead. Your trust asset protection lawyer in Dallas can help you with applying for the homestead exemption along with several others, if applicable.
Besides selecting the appropriate type of strategy, the best way to protect your assets is to practice a high degree of discretion. As soon as you let others know about the assets that you own, you place yourself at a higher risk of being subject to unsolicited lawsuits. Trusts are one of the best ways to effectively hide the assets that you own because they do not require or involve the creation of public records. There are several approaches to trust asset protection in Dallas.
Other Issues to Consider
When it comes to deciding what asset protection techniques work best for you, it is a good idea to consider the types of assets that you want to protect and consult with your trust asset protection lawyer in Dallas TX. Whether you have your assets in bonds, real estate, or other types of holding will end up influencing what types of asset protection tools you should use.
Different types of assets should be protected in unique ways. Instead of utilizing only one asset protection strategy, it is almost always better to utilize a range of asset protection techniques.
When creating asset protection strategies, it is also a good idea to engage in estate planning sooner rather than later. Understanding the role of asset protection tools does not help if you do not take the steps necessary to create them before they are needed.
Contact a Knowledgeable Texas Estate Planning Lawyer
Trust asset protection in Dallas is just one of the goals that you might hope to achieve through estate planning. To discuss how to best realize your estate planning goals, it can help greatly to speak with an experienced estate planning attorney. Schedule a case evaluation with the Kazi Law Firm today.