First, the bigger picture of asset protection and estate planning involves
some general and very important concepts and goals:

  1. You should separate your source of liabilities, which is also your source of
    income, from your personal wealth;
  2. You should use legal entities or multiple entities to create the legal shield of
    separation;
  3. You should be investing for your personal financial freedom (retirement),
    and you should protect and shield that personal wealth.

Second, some of the tools you can use specifically include the following:

  1. The Corporation, particularly the Sub "S" Corp;
  2. The LLC, Limited Liability Company;
  3. The Limited Partnership;
  4. The Family Limited Partnership;
  5. The Revocable Living Trust;
  6. The Irrevocable Living Trust;
  7. The Irrevocable Life Insurance Trust;
  8. Charitable Trusts;
  9. Nevada and/or Washington Corporations/LLCs;
  10. Off Shore Business Corporations;
  11. Domestic and Off Shore IBC and/or Trusts;
  12. The Common Law Trust.

The value of good advice in this area is in the plan.  The drafting of the
documents is secondary, although it is important to know that some
attorneys who specialize in mass producing revocable living trusts do
not always take care of the details, i.e. funding the trust properly,
creating taxable events with transfers.

The old rule of keeping things simple should still be applied, but some
level of complexity will be necessary to use some or a combination of
these tools to protect your personal wealth and to shield you from
liabilities.  

If you are a business owner, you will want to do some business
succession planning, and your personal estate planning and business
planning should be coordinated to accomplish your overall goals.  In the
end, you want to make and keep the most money you can from your
businesses, live the kind of lifestyle you desire to live, and protect
yourself and your family from ridiculous lawsuits and greedy attorneys.
If you don't comply
with the corporate
formalities of your
corporation (or LLC),
a plaintiff could pierce
the corporate veil and
reach your home and
personal bank accounts.
Charles Marunde, J.D.
Copyright 2005-2006 by FreeRealEstateLaw.com and Charles E. Marunde
Estate Planning & Asset Protection
Learn on this site how to do good estate planning and good asset protection.
Learn also how to coordinate your business planning with your estate planning.
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Types of Trusts