Asset Protection Traps to Avoid
Planning to protect your assets is a common thing nowadays; however, the misconceptions in this regard make it difficult to separate the facts from the fiction. Moreover, unscrupulous people try to sell asset protection ideas that are fraudulent in nature, and not really strategies as they claim.
How do you know that a certain ‘strategy’ is not legal? Here are a few common scams that you may come across. Some of these take advantage of your lack of legal knowledge while others aim at taking away your property and leading to legal trouble.
A strategy would save taxes – If someone promises to save taxes with asset protection, you had better stay away from their guidance. This plan has nothing to do with saving taxes. However, sometimes so-called specialists do claim that you can avoid taxes if you put all your assets in an offshore account or a trust.
If you are an US taxpayer, no matter where your assets are, you need to pay on all the income these generate. If your specialist says you need not report the income from offshore assets to the Internal Revenue Service (IRS), you are committing tax evasion, which is a crime punishable by back taxes, fines, and even jail time.
A single strategy would do it all – No single tool can provide you standard protection for all your assets. You need to create a comprehensive plan that offers protection for all types and worth of assets. Moreover, there are tools that are good for estate planning, but not at all effective for asset protection.
Some good examples would be creating a living revocable trust or gifting your spouse/children some portions of your property. In both these cases, you may save on the estate and probate taxes. However, in case of involvement in litigation, the court may order the reallocation of assets to recover damages
If you think that putting all your assets in a Nevada Corporation is the best solution, think again. It is one of the common scams in use. It involves deceiving the IRS by creating different entities for ownership of businesses you own and reporting taxes accordingly.
A specialist can help you – Always make sure you get an asset protection attorney with the right education, certification and experience. There are many who claim to be experts in this field but do not have any knowledge or certification in laws or finance. Do not go by their ads; instead, check their profiles, know what they do, and how they do it, and if you think they have the right credentials, consult them.
About the Author
Amalisha Brooklin, a legal journalist, offers tips and suggestions regarding legal issues concerning asset protection matters. If you are looking for an asset protection attorney, she suggests you to visit http://www.threestepassetprotection.com.
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