Protecting your assets just makes common sense, but many think there is plenty of time to get it done. Read the papers. That isn't necessarily true. Protect what is yours with these five asset protecting instruments.
How many times do you have to hear the words, "Do you have a will?" before you get one? A will is a legal document with declarations of how you want your estate, and underage children, to be cared for after your death. Wills can keep the state from taking all of your assets, leaving your family empty-handed.
Written correctly, a family limited partnership, will protect your assets from all lawsuits.A limited partnership, formed by your family members, has great potential benefits for federal gift in addition to the estate taxes, but it should be formed with the assistance of a lawyer who specializes in taxes or the entire thing may collapse upon your death.
The best way to avoid probate court is to have a living trust. In most states, the trust allows your assets to be transferred to your family immediately.
A C-Corporation is a basic legal business structure. The C-Corporation will lower your taxes because it taxes separately from your personal income. It may be owned by an unlimited number of individuals, so your entire family could be listed.
When you donate your home or other assets to a charity, you can receive tax breaks and a place to live or income for an agreed upon period of time. It cuts your capital gains tax to zero and eliminates the death tax. You can even buy a life insurance policy that replaces the value of the estate for your family; in most cases the insurance money is tax-free.
Because there are many legal ramifications to these five instruments, be wise and place them in the hands of the experts. Do it today and you'll never have to worry about your family and your assets again.
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