Legally Mine: Are Your Bank and Brokerage Accounts Safe From Lawsuits?

How and where you keep your savings and retirement money can have a huge impact on how secure it is. This statement isn’t necessarily a commentary on how you decide to build your wealth, but on how and where you store it. Ask yourself, “in the event of a lawsuit, would my wealth be legally mine?”

Bank and brokerage accounts, for example, are some of the safest financial assets you can have. By themselves, these accounts aren’t necessarily at particular risk of being sued out from under you. However, when you are named in a lawsuit and these assets are found during an investigation, the fact that you even have them could give an opposing attorney reason to recommend pursuing the suit to gain access to your other types of wealth. Perhaps this seems unfair, but no matter how unfortunate it is, it’s completely legal.

So, How Do I Ensure My Assets Are Legally Mine?

When an attorney performs an asset search, they will be looking for wealth that exists under your name. Therefore, if you change the owner’s name of record of your brokerage or bank accounts, you can shield them from being associated with you.

Name modification is an effective asset protection tool when used along with limited partnerships and other asset protection strategies. If you maintain signature authority over these bank and brokerage accounts, they may still be exposed during an asset search. The important thing to remember, however, is that under a limited partnership or other asset protection entity, a creditor’s ability to access those accounts will be severely limited or completely void. This is where your “legally mine” protection lies.

Why Can’t I Transfer Assets to Heirs?

It’s common for people to transfer their bank and brokerage accounts into the name of a child or spouse. But the good intentions of this practice can have unexpected drawbacks. You might add someone else’s name to the account so that they can take care of bills and other transactions in case you are ever rendered unable to do so. But keep in mind that when someone else becomes co-owner of those assets, they not only have the right to withdraw the money, but that wealth could also become accessible to their creditors.

Also remember that in the event of your death, joint tenancy ownership will always supersede a will or trust. “That means the co-owner of your bank and brokerage accounts will become the owner, no matter what your trust or will has to say about it,” says Matthew McNeff, asset protection specialist at Legally Mine.

Consider a Separate-Limited Partnership

The best way to ensure you’re using the right asset protection strategies is to consult a specialist. He or she can help families with significant liquid safe assets choose the right asset protection strategy. This will often include a Limited Partnership, which can be used to hold savings and brokerage accounts, along with stocks and bonds, antiques, collectibles, jewelry, artwork, family heirlooms — essentially anything of real value to the family outside of firearms or vehicles.

Since these are liquid assets, they are not necessarily tied to the family’s state of residence. That leads many asset protection professionals at Legally Mine and other firms to establish these partnerships in states with a history of very strong Limited-Partnership provisions, such as Utah, Nevada, or Alaska (Legally Mine is actually located in Utah).

When setting up a Limited Partnership or other asset protection strategies, the most important thing is to use an experienced professional. Start by doing some homework to find a qualified asset protection attorney in your area. Then, have an open conversation about what assets you have in place so that he or she can help you protect what you’ve worked so hard to accomplish.

Asset Protection for the Business Owner | Legally Mine

Many small business owners underestimate the possibility of a lawsuit as well as the measures they could take to prevent one. Our professional consultants at Legally Mine will help you develop a plan to protect your assets.

To get started, knowing what types of claims you might face and which assets are most at risk will benefit you before implementing a strategy. Legally Mine will make sure you know what all your asset protection options are and help you to create a personalized plan that suits your specific business needs.

Internal Claims vs. External Claims

Internal claims will only affect the assets belonging to the company. For example, an injury that occurs on company property or with company equipment can only lead to loss of that property, equipment, or other assets owned by the company. An internal claim runs under the assumption that you personally were not responsible for the accident.

 However, if you are operating the equipment or you own the property, an external claim may be filed. An external claim holds you personally accountable and your personal assets are now at risk as well. Your Legally Mine consultant can answer any questions you may have about internal and external claims and advise you on how to keep them safe.

What is a Dangerous Asset?

Dangerous assets are those that have the potential to cause a problem. Real property, machinery and equipment, and company vehicles are all dangerous assets because they present a liability risk.

Safe assets are generally monetary rather than tangible. Assets like stocks, bonds, and personally-owned bank accounts are considered safe assets, as they can not cause problems on their own.

How Can I Protect My Assets?

The first step in protecting your assets is to set up a meeting with Legally Mine to go over your finances and expectations. Legally Mine will educate you on the benefits and drawbacks of each asset protection option as it relates to you. A solid protection plan will include ways for you to maintain control of your assets without direct ownership, thus reducing the risk of personal loss in a lawsuit. Some of your options may include forming a C Corporation, S Corporation, Limited Liability Company, Partnership or Trust.

• C Corporation - Individuals and the corporation are both taxed separately in a double taxation. This option allows for profits to be reinvested into the company at a lower corporate tax rate.
• S Corporation - A company with fewer than 100 shareholders can be taxed as a partnership while still gaining the benefits of a corporation. This way double taxation is avoided.
• Limited Liability Company - This option combines the benefits of a corporation and a partnership and allows members of the company freedom from liability.
• Partnership - A General Partnership is an agreement between two people where both parties are responsible for all asset liability and is not usually recommended. A Limited Partnership includes both general and limited partners, allowing limited partners to not be personally responsible for the debts of the partnership.
• Trust - In a trust, a grantor is responsible for holding onto the assets for another party and distributing them to the trustee as agreed upon.

When choosing a firm to assist you in organizing and protecting your assets, keep in mind that many law firms do not specialize in asset protection. Legally Mine has over 40 years of experience helping medical and business professionals protect their personal and business assets. Because asset protection is all we do, we have attracted a large volume of clients, which allows us to charge less than standard competing attorneys. As your business grows, we’ll continue to advise you on the best asset protection plans and make adjustments as needed.

What is Asset Protection? | Legally Mine

Asset protection is something that people tend to misunderstand. Some see it as a tool for avoiding financial responsibilities like paying debts or taxes, or essentially as a means of covering for fraud.

In reality, asset protection is an important part of financial planning that can protect you from fraudulent or petty claims. The key is to make sure it’s done properly. That’s why turning to experts like Legally Mine is important to your financial planning.

Asset protection is implementing financial planning strategies to keep your assets safe from legal claims against you. There are a number of strategies you can utilize, such as:

• Liability insurance: This is a good first line of defense. One shortcoming, however, is that it can open you up to more legal claims from people who see it as easy money.
• Corporate designations: Using corporate designations like limited liability can also protect you from losing assets.
• Financial planning: This is an all-around strategy that planning experts like Legally Mine can help you with. It includes designating certain assets as exempt from claims against you.

How People Get Asset Protection Wrong

The biggest mistake people tend to make when trying to protect their assets is waiting until it’s too late to do so. It is unlawful to engage in asset protection after a claim has been filed or is even about to be filed against you. This will appear fraudulent and is where many misconceptions of asset protection arise.

How to Do It Right

Instead of thinking of asset protection as a response to a claim against you or your property, it’s important to think of it as an integral part of your financial planning before anything happens. That’s why turning to someone like Legally Mine who can integrate all key elements of your planning is a sound strategy. You’ll want to review your financial goals like retirement and estate planning with your financial and legal planning team. Try to set timelines for these milestones, and have a clear picture of your net worth and assets that have protection potential.

Once you have a clear picture of your assets and various defense lines established, you can protect yourself from legal claims against your property. Rather than being a tool for committing fraud, asset protection -- when done properly and ahead of time -- is a way of keeping yourself safe from fraud.

Call Legally Mine today for a free consultation. We have the expertise to answer your initial questions formulate a strategy to protect you and your assets, making us your number one choice for asset protection. This will give you the peace of mind you want and the protection you need before you ever need it.

Selecting the Best Entity for Your Business | Legally Mine

When starting a new business, you’ll find you have a lot of choices to make. One of the most important choices is which type of legal business entity is right for you. In the United States, you have five options: Proprietorships, General Partnerships, Limited Partnerships, Corporations, and Limited Liability Companies (LLCs). Before becoming an official business, your company must be registered as one of these organization types. Each entity has pros and cons. In considering the best for your business, Legally Mine suggests you keep these two questions in mind:

1. Which entity offers the best asset protection?

The best business entity for asset protection and protection from lawsuits is a corporation, Legally Mine experts say. When a corporation is run effectively, it will protect you and other owners from the practices of the business. However, corporations also have added expenses in time and money. Corporations have some specific requirements, including annual meetings, stock ledgers, stock certificates, minutes, and corporate resolutions. They also have expenses such as filing, attorney, and accounting fees. But many business owners decide that the superior lawsuit and asset protection is worth the extra cost and effort.

Comparatively, sole proprietorships and general partnerships are easier and less expensive businesses to run. However, they offer business owners little protection. Limited Partnerships and LLCs are becoming popular options due to tax flexibility, lack of corporate requirements, and charging order protection.

2. Which entity offers the best tax requirements for my business?  

How do you want your business to be taxed? You have four options: your business can be taxed as a C-corporation, S-corporation, a Partnership, or a Sole Proprietorship. If your business is turning a good profit and you’re looking for individual tax perks, being taxed as a C-corporation might be your best bet.

On the other hand, if your business loses money during the first few years, you might prefer to structure as an S-corporation or Partnership. In these organizations, losses flow from the business directly to the business owners. General Partnerships and Sole Proprietorships will have an easier (and cheaper) time calculating taxes, but they also have fewer deductions allowed. No matter which structure you chose, check with an accountant or law experts at Legally Mine to make sure you understand and follow all tax requirements.

The best option

It’s up to you to decide what entity is best for your company. In general, Legally Mine recommends Limited Partnerships and LLCs—when they have clauses outlining asset protection—as a great way to go for most people. This option provides both asset protection and charging order protection.

Need advice on asset protection for your business? Call Legally Mine for a free consultation today.