The theory behind wealth preservation is to move assets away from a potential creditor's reach. The ideal time to consider wealth preservation planning is before being sued or threatened with a suit and while the individual is solvent. At Morris Law Group, we employ a tiered asset protection approach to create a Wealth Preservation Solution that is unique to each client’s situation. Below are the asset protection tiers, starting at the simplest form:
- Retirement Benefits:
- Umbrella Insurance:
- Joint and Concurrent Ownership:
- “Tenancy in Common" is ownership by two or more persons sharing only unity of possession. Each individual owner's interest in the property is freely transferable by that owner. There is no element of survivorship between the owners, and each tenant in common is free to transfer his interest during life or to devise his interest at death. An individual's interest in property held by a tenancy in common is freely attachable by creditors. This is an undesirable form of ownership if a primary goal is to protect assets from the reach of creditors.
- "Joint Tenancy" is ownership by persons who share an undivided interest in the asset. Following the death of a joint tenant, the surviving joint tenant becomes (as of the moment of the other's death) the owner of the entire interest in the asset. Creditors may also reach a joint tenant's share of an asset during the joint tenant's lifetime. This form of ownership should be avoided as the assets may be attached by the creditor of either party. This also applies when you are added as a joint account holder for a parent or other relative as a convenience.
- "Tenancy by the Entireties" is available only to a husband and wife. The general rule states that an asset held in a tenancy by the entireties is not reachable by the creditors of either spouse. However, if a husband and wife are jointly obligated on a debt, the creditor may reach entireties' property to satisfy the debt. (This is why most banks require a spouse's signature on unsecured promissory notes.) This form of ownership is the most desirable from a wealth preservation perspective, but it is obviously only available to persons who are currently married. To date, about half of the states (including Florida) recognize tenancy by the entireties. Please be advised that there have been two recent bankruptcy cases in Florida, a recent Michigan bankruptcy case and a United States Supreme Court case that has found that tenancy by the entireties property may be accessible by the creditors of one spouse.
- Entity Planning:
- Wage Account:
- Revocable Trust:
- Irrevocable Trust:
- Domestic Asset Protection Trust (“DAPT”):
- Offshore Trust:
The experienced attorneys of Morris Law Group create unique Wealth Preservation Solutions tailored to meet the needs of each client. However, once your solution is created, it is not complete. This is an ongoing process and the attorneys at Morris Law Group will continue oversight and maintenance of your Wealth Preservation Solution to make sure it is aligned with your changing goals and objectives.
Interested in learning more? Contact us today.