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Colorado Notary Public and Legal Document Services
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Asset Protection
Supreme Court: IRA Protected In Bankruptcy- In a unanimous decision, the Supreme Court ruled that creditors may not seize Individual Retirement Accounts (IRAs) when people file for bankruptcy. IRAs should not be treated any differently because the benefits are tied to people's ages, the court said, citing a substantial tax penalty that is imposed for withdrawals before a person turns 60. "That penalty erects a substantial barrier to early withdrawal," Justice Clarence Thomas wrote for the court. "Funds in a typical savings account, by contrast, can be withdrawn without age-based penalty." The case involved a rollover IRA from employer-sponsored pension programs. Many landlords choose to form a Limited Liability Company (LLC) to hold title to rental properties, rather than owning property personally as a sole proprietor. Tenant lawsuits, arising from rental property, such as a death or serious injury, can be awarded millions of dollars, exceeding insurance coverage and driving landlords into bankruptcy, losing all of their assets. Real estate can be owned by a Self-Directed IRA, but a stronger asset protection strategy is to have the IRA form an LLC, and then the IRA LLC owns the real estate. Serious stock and options traders often form a corporation or LLC to operate their trading business separately from their personal finances. Small business owners often form a corporation or LLC, rather than operating as a sole proprietor. In some cases, corporations or LLCs in Nevada, Wyoming, or Delaware may be chosen, rather than incorporating in your home state. Business owners should learn about establishing proper legal nexus (presence), filing proper documents, keeping proper records and following applicable laws. We can help you find educational information so you can increase your knowledge to help make intelligent decisions on which entity is best for your situation. You can learn the secrets of the wealthy to manage, control and help protect your assets from losses and lawsuits. Asset protection is part of a good financial plan and must be done before a threat occurs. Attempting to hide or transfer assets after you have been sued is illegal, but protecting your assets before a lawsuit occurs is a wise strategy to preserve your wealth. Proper estate planning is also needed to protect your wealth from excessive estate taxes. Many large estates of famous people have been largely lost to estate taxes because of poor estate planning. New Bankruptcy Law: On October 17, 2005, the U.S. made the largest change in bankruptcy law in 25 years. The new law, called the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), makes bankruptcy abuse a less desirable option for consumers and small businesses. It changes the U.S. bankruptcy law from debtor-friendly to creditor-friendly. Think twice before taking on too much debt or use non-recourse loans where you are not personally liable for repayment. Debtors who file Chapter 7 bankruptcy can wipe out their financial debt. With the new law, they will be required to file Chapter 13 bankruptcy, where they will have to pay back part of their debts for 3 to 5 years if their income is higher than the median for their state (means testing). Community Property States: In community property states, most property, assets, debts, and income acquired during a marriage (except for gifts and inheritances) is considered to be community property, owned jointly by both spouses, regardless of how the ownership of the property is actually titled, and is divided equally upon divorce, annulment or death.In other states, known as common law states, married persons can have individual and joint property, assets, debts, and income. The way the property is titled determines the ownership. Generally, property that each person acquires before the marriage, after legal separation, or that is received by gift or inheritance, is called separate property. To maintain separate ownership, do not commingle separate funds or property with joint funds or property. Upon divorce, spouses may negotiate a property settlement agreement, or separation agreement, or courts will decide how property is divided, based on state laws and an equitable (fair) division. You may wish to consider signing a pre-marital agreement and the effects of moving to another state on your property and income ownership and estate planning. If you own or buy real estate in another state, the laws of the state where the real estate is located will apply to that property, regardless of where you live. Seek qualified legal and tax counsel for
questions about community property, common law property or marital
property. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin. Puerto Rico. Alaska (upon election by the spouses) Contact us for a FREE CONSULTATION. Disclaimer: ABC Legal Docs, LLC does not offer legal, tax or accounting advice. Contact a licensed, qualified professional for legal, tax or accounting advice.
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Building
your wealth on the road to financial independence requires knowledge, planning,
discipline, investment capital and investment opportunities. Building
wealth also depends on your ability to analyze and manage risks wisely and avoid
catastrophic risks that can destroy your wealth.