Asset protection concentrates on protecting and preserving property from seizure by predators, creditors and/or taxation. However, every state has their own state laws, county laws and state taxes. It’s not only about protecting your assets on a federal level. Also, we want to clarify exactly what asset protection is (and what it’s not), as well as clarify what an asset protection firm does to help its clients. A primary market that we serve our clients is in Texas, USA, so we’re going to focus on discussing why it’s important to take advantage of hiring an asset protection firm if you live or operate a business in Texas.
What is Asset Protection and What is it Not?
Asset protection is designed to shield assets, such as real estate, personal property and cash, through various legal investment strategies without participating in any illegal concealment practices that would otherwise be fraudulent. In other words, there are trusts, family limited partnerships, retirement strategies and other financial products that can protect assets from creditors, predators, or taxation. Asset protection should NOT include any illegal means of hiding assets from the government (tax evasion) or burring money in the backyard. Depending on your future financial plan and assets, a trusted asset protection firms will guide you through all of the potential asset protection plans that will work best for your personal situation.
What Are the Advantages of Hiring an Asset Protection Firm in Texas?
Firstly, Texas does not have any state taxes. That’s why more families and business are moving to Texas more than ever. However, that doesn’t mean that all of your assets are protected the way that they could be. Your Texas real estate may still be vulnerable to legal suits against you or seized in certain scenarios. Having a certified asset protection firm in Texas that understands Texas state laws and taxation strategies on a federal level is intended to give you an advantageous gameplan for protecting your assets against any threat.
Asset protection firms are masters of the “protection laws” and investment strategies that aim to protect assets against many threats.
What Kind of Asset Protection Strategies Might an Asset Protection Firm Suggest?
It all depends on your situation, but personal and businesses alike, there is an asset protection plan for every situation. Here a couple examples of asset protections strategies.
Retirement Plans are an Asset Protection Strategy
Retirement plans are one incredibly important strategy that asset protection firms in Texas safeguard their client’s assets. According to the Employee Retirement Income Security Act of 1974, retirement plans are exempt from creditors. Most, if not all, asset protection firms are also experts in creating retirement plans for individuals (married or single).
Homestead Exemption in Texas
A primary residence in Texas is protected by the homestead exemption. This is a huge advantage for residents in Texas. Basically, the equity in your primary real estate (you must live there full-time), is protected from creditors. Now there are additional ‘rules’ such as the 1215 rule which basically states that if the home was purchased within 1215 days, the equity exemption is only good for up to $125,000. But again, this is why all of this should be considered on an individual level with an asset protection firm in Texas. They will be able to walk you through your specific scenario with exact information.
Asset Protection Trusts
One of the strongest asset protection strategies is known as an asset protection trust. This is where your personal assets are transferred to a trust which is managed by a 3rd party trustee; and therefore, no longer legally owned by the original owner (“you”). The original owner of the assets still receives all of the benefits of the assets and can control them through the trustee.
Texas Legacy Trust
Specifically in Texas, we have a Texas Legacy Trust. This trust provides similar asset protections as a “domestic asset protection trust”. The difference is that in Texas this asset protection strategy protects you from past creditors but does not protect you from new or future creditors. Also, once the trust is created, it’s irrevocable and cannot be changed. Nevertheless, it’s designed to give you the protection of granting a family member, spouse or child as the trustee while you remain the beneficiary.
Every situation is going to be different, which is why we recommend speaking to an asset protection firm in Texas so that they can better guide you with specifics on your circumstances.
Schedule a Free Initial Consultation with an Asset Protection Firm in Frisco, TX
J&S Partners Inc has a mission to protect their client’s assets and strives to provide freedom from financial worry. Being an independent financial planning and asset protection firm in Texas, they aim to help every client with all aspects of their financial lives, including retirement planning, wealth management, annuities, and of course, asset protection. Schedule a free initial consultation with one their advisors today with no-obligation by visiting: jspartnersinc.com or calling them directly at 651.307.9052.
The information in this newsletter is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek guidance from an independent tax or legal professional. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Broadridge Advisor Solutions. © 2022 Broadridge Financial Solutions, Inc.