What is Asset Protection? An Experienced New York Asset Protection Lawyer Explains

Serving Families Throughout Melville

If you are approaching your golden years with estate planning and elder law concerns, you will inevitably encounter topics related to asset protection. You may ask, “What is asset protection, and why do I need it?” Businesses, individuals, or the state can take your assets in multiple ways—sometimes after you pass away, compromising the legacy you intended to leave to your family.

At Schneider, Garrastegui & Fedele PLLC, we help our clients in New York to plan properly so they can avoid the dangers that threaten their assets and legacies. Read below to learn more about asset protection, then contact our New York asset protection attorney team at (631) 519-9831 to schedule a consultation.

Asset Accumulation Brings Susceptibility to Lawsuits and Increased Risk of Losing Estate Assets in NY

An asset is a resource that has economic value. Individuals accumulate assets over time, often seeking to transfer them strategically to others before or after they pass away. Some examples of assets include real estate, vehicles, bank accounts, retirement accounts, brokerage accounts, stocks, bonds, and pensions.

Just as assets can accumulate during one’s life, so can the threats to assets. Failed businesses, creditor judgments, estate taxes, business lawsuits, and personal liability are common threats to your assets. Professionals in the medical or legal fields are often targets, and a liability lawsuit or a creditor judgment can endanger small business owners.

Consequently, you must plan for the inevitable and prepare for incidents that could happen at any time, such as a slip-and-fall on your property. Asset protection strategies seek to remove your assets from the reach of these threats by evaluating risks and adjusting legal terms surrounding those assets.

Taking Inventory of Your Assets and Associated Risks in New York

Asset protection strategies are particular to the assets you have. Taking inventory of your assets with the help of an experienced New York asset protection lawyer will also allow you to understand the risks associated with each of those assets.

You could lose assets in a variety of ways. Divorces involve the distribution of assets between the two spouses. Without a prenuptial or postnuptial agreement, knowing which spouse will receive particular assets may be challenging once the divorce is finalized. Your beneficiaries may also squander your assets without an appropriate asset protection strategy, and their potential divorces pose a risk to the assets you wish to transfer to them.

Bankruptcy and failed businesses can threaten your assets in ways you may perceive as unrelated to the events that caused them. Owners of small businesses are often personally liable for their companies, and an unexpected economic downturn or an unfortunate event could put you in a position where the safety of your assets is compromised.

Suppose you require care at home, at a nursing home, or an assisted living facility. These services can be costly, and you may need to qualify for Medicaid eligibility. An experienced NYC asset protection attorney can assess the threats to your assets and help you implement an effective strategy to protect them while planning for your future.

New York’s Estate Taxes Threaten To Take a Large Portion of Your Assets

New York is an estate tax cliff; you need to take steps to prevent your assets from being subject to estate taxes, or else you will not be able to leave as much to your loved ones when you pass away. A comprehensive estate plan incorporating a Last Will and Testament and trusts can help you to guide your assets toward your intended recipients. Additional strategies such as lifetime gifts and charitable bequests can also help mitigate the threats of estate taxes in New York.

Understanding Asset Protection Strategies Involving Irrevocable Versus Revocable Trusts in New York

Not all trusts provide the same levels of protection for your assets, and a significant distinction to note is whether a trust is revocable or irrevocable. A revocable trust allows you to modify the terms and retain access to the assets placed in the trust because they remain in your estate. An irrevocable trust cannot be modified, and it can remove the assets from your estate.

An Asset Protection Trust is an irrevocable trust that provides asset protection because creditors cannot easily threaten the assets placed into them. Asset Protection Trusts are sometimes called APTs, and there are different types to discuss with your asset protection attorney. Medicaid Asset Protection Trusts (MAPTs) are vital elder law and estate planning tools that can help you plan effectively for long-term care at home or in a nursing or assisted living facility.

Incorporate Asset Protection Strategies Such as Retirement Accounts and Legal Entities for Your Businesses

You can protect assets by strategically contributing to a retirement account that provides federal protection from creditors. While New York does not allow Self-Settled Asset Protection Trusts to shield assets from creditors.

Many small business owners make the mistake of operating in a way that opens their personal assets up to the risks and liabilities of their businesses. Wiser strategies use the protections of a Limited Liability Company (LLC), a Limited Partnership (LP), or a corporation. Our asset protection legal team can help you mitigate risks to your assets.

Conduct an Assessment and Prepare a Strategy by Scheduling a Consultation with an Experienced New York Asset Protection Attorney

At Schneider, Garrastegui & Fedele PLLC, we help our clients in NY shield their assets from creditors while reducing or eliminating estate taxes. Our strategies can help you grow your wealth in a way that does not make you more susceptible to the unexpected loss of your assets.

Much like carrying appropriate insurance, an essential key to asset protection is to implement an effective strategy well before the problems you anticipate arise. Call us today at (631) 519-9831 or complete our online form to schedule a consultation.

Copyright © 2023. SCHNEIDER, GARRASTEGUI & FEDELE PLLC. All rights reserved.

The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.

135 Pinelawn Rd #250s
Melville, NY 11747
(631) 519-9831

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