Asset Protection

We assess your risks, design the proper strategy to mitigate those risks to protect your current lifestyle and protect your family legacy

When it comes to estate tax planning and risk mitigation, there are effective strategies to reduce or even eliminate estate taxes, protect your hard-earned assets from future known financially ruinous lawsuits using integrated estate planning and asset protection planning techniques. Traditional investments can have a seat at the table, but it is the synthesis of the newer and more creative strategies that have enabled us to help savvy affluent families and successful businesses grow and hold on to their assets in case of a black swan event.

Let us show you planning techniques that will transform conventional thinking.

As a successful business owner, executive, or investor, you haven’t achieved your success not hoping for the best, but planning for the worst. So, thinking differently should hardly be disruptive. There’s no downside to looking.

Asset Protection Trust

Creating a traditional revocable family trust to avoid probate and reduce administrative costs is like skydiving without a parachute.  The estate planning process is not complete until you have factored into the planning “firewall” protections against the unforeseen legal claim that can wipe you out. In litigation, the process is the punishment, so integrated asset protection planning tends to remove the “profit from the pursuit” and encourages quick and less expensive settlements, protecting your hard-earned treasure from lawsuit creditors and predators.

In fact, 95% of the world’s lawsuits are filed in this country, but over 90% of these settle. They settle for one of two reasons: doubt at the liability or doubt as to collectability. Asset protection planning leads to the latter, and thus, fosters an environment of settlement, not litigation. Whether you are looking at a basic estate plan or one more sophisticated to mitigate large death taxes, integrating asset protection planning with your estate planning is mission critical to preserving and protecting your family’s legacy.

Domestic Asset Protection Trust

All these domestic structures can protect your assets—but when it comes to using the cash flow from those assets to support your lifestyle, domestic asset protection structures have their limitations. A court has the power to block the use of the cash flow to support the debtor’s lifestyle through a court-issued Protective Order, leaving no ability for the debtor to pay his bills. The tougher you make it for a future creditor to reach your assets, the quicker the case will be settled for a much smaller sum.

Foreign Asset Protection Trust

Since 1989, the Cook Islands have been regarded the premier foreign asset protection trust jurisdiction in the world. While these trusts are income tax neutral and have zero impact on your personal income taxes, the IRS has little care that you establish one provided you disclose them by filing a few required forms[1]. A trust formed overseas in a country that has the more protective laws protecting the trust’s assets discourages a future judgment creditor from pursuing those assets, absent a fraudulent transfer.

CA Private Retirement Plan

For the California resident, meet the best asset protection strategy very few have ever heard of – The Private Retirement Plan or PRP.

With a Private Retirement Plan, established under CCP 704.115, assets held in a PRP are exempt from the plan participant’s judgment creditors except in the case of alimony and child support.

The participant’s employer is the sponsor of the plan and establishes it for the benefit of the employee/owner, often to supplement the assets held in your tax or ERISA qualified retirement plan. Under California special exemption law, assets held in your PRP, such as cash, stocks, business profits, savings, bonds, gold, real estate, notes, even corporate stock and private business interests held for retirement are protected from lawsuit creditors and predators. When you begin to receive your retirements distributions, those distributions are similarly exempt from existing or future creditors, just as is the case with a tax qualified or ERISA qualified plan

Complete our Lawsuit Exposure Stress Test to see how protected your assets are and whether additional planning should be considered.  

Case Studies

Bill and Mary: Protected Their Assets From Lawsuits or Attachment

Bill and Mary, a couple with a strong desire to safeguard their legacy and retain control over their resources, sought assistance from Falcon Rappaport & Berkman’s Asset Protection Practice Group. With over 35 years of marriage and three married children, they aimed to protect their assets while accessing them when needed. Bill, a successful business owner and investor, received an appealing offer to sell his business and wished to devote more time to his family and personal investments, including rental properties. He also intended to remain on the board of directors of certain companies. Concerned about potential liabilities, Bill sought advice on restructuring their estate plan to build “firewall protections” around certain assets, such as their personal residence , non-qualified plan portfolio investments, and rental real estate holdings. Falcon Rappaport & Berkman provided a solution encompassing comprehensive estate planning and reducing their taxable estate by gifting certain legacy assets to their children and grandchildren, while placing the assets they require for consumption and lifestyle needs are “silo’d in an asset protection trust protected from future lawsuit creditors and predators. . By implementing this strategy, Bill and Mary achieved their objectives: asset protection, estate tax reduction, control over their properties and investments, and a robust estate plan that would withstand legal challenges in the future. This matter was handled by the attorneys in our Asset Protection Practice Group prior to joining FRB earlier this year. 

[1] Form 3520; 3520A and FBAR