Asset Protection for Professionals and Business Owners in Oregon
Salem Oregon and Portland Oregon Area Asset Protection Lawyer Offers “Come-To-You” Legal Services
Asset Protection Is An Estate Planning Strategy That Is Only Effective Against Future, Not Present Creditors!
Timing is everything with Asset Protection planning. This is one planning strategy that must be done now rather than later. You know you have certain threats that are present today. These treats can be pending lawsuits, creditor claims, likely divorce, or a failing income source that will leave you unable to pay your debts. Asset protection does not work for known or reasonably likely claims. While the Fraudulent Transfer Statute in Oregon does not distinguish between reasonably likely claims and all other future claims, asset protection grows stronger if you are someday facing a new creditor or claim that was unforeseeable. The area of asset planning is filled with minefields and is one are that you should consider the assistance of an experienced asset protection planning attorney. Remember, asset protection only works before there is a problem.
Whether the risk is losing you assets through a frivolous lawsuit or losing your child’s inheritance to his or her creditors, or your children have a risk of squandering their inheritance either because of poor money management or addiction, or to a spouse who receives a large portion of your son’s inheritance when they divorce, or from affluenza (also known as spending large sums of money within a very short period of time), there are asset protection planning techniques that will enhance the likelihood that your assets will go to the person you desire them to go to and protect them from these predators.
How do I protect my own assets?
The following are some of the strategies that can be used when we include asset protection in an estate plan. None of them are completely protective and a solid asset protection plan often combines multiple sources. Also, none of them are effective for current or reasonably likely claims.
Use Exempt Properties for Protection
Oregon estate planning and asset protection attorneys have a large toolbox of tools that can be used to protect your assets from creditors and predators while you are living, and to protect your beneficiary’s inheritance after you die. With respect to creditors, Oregon law and federal bankruptcy law provide certain exemptions for property which the legislature had deemed to be exempt from attachment by creditors. For example, in Oregon, a married couple has an equity exemption in their home, called a homestead exemption that is protected from creditor’s suits. Qualified ERISA plans are also exempt property that allow some protection from creditors.
Exemption planning consists of holding your assets in a form typically exempted from creditors by statute. In Oregon exempt assets include a portion of your homestead, pension plans, life insurance proceeds, unemployment benefits, a certain amount of tools of the trade, a certain amount of wearing apparel, hand guns with a limitation, a certain portion of equity in a vehicle, books, pictures and other items up to a limited amount. While exemption planning provides some protection, clearly not all assets can be held in exempt form. Further, under the current bankruptcy law there are limitations on exemption planning
Insurance to Protect Against and Defend Lawsuits
We live in an overly-litigious society where an overabundance of laws and an increased scope of duty costs everyone money. A frivolous lawsuit could happen to you and your business could be lost if you are not protected. Even if you successfully defend a lawsuit, you will pay dearly. Defending a lawsuit, even if you are victorious, will cost you as much as $50,000.
Another option is to obtain special insurance to protect against certain specific types of losses. Generally, insurance will provide protection for tort liability, but individual policies may have specific exclusions that exclude coverage for a claim, or the amount of the claim may exceed the amount of the insurance policy limit. However, you may be able to purchase insurance for a specific risk that you feel might occur in the future.
On the personal side, consider purchasing a personal umbrella liability policy. This type policy is designed to place an umbrella of coverage over your first layer policy. Umbrella policies usually cover the same risks that primary layer polices cover, but the coverage does not apply until the underlying coverage is exhausted. Make sure that you purchase enough, at least equal to your net worth. Contact your insurance agent for a review of your risk and to identify any gaps in coverage
Another method of protecting specific assets is through a Premarital Agreement. A Pre-Marital agreement provides that certain assets belong to each spouse at the time of marriage and as long as the assets are not co-mingled, would remain the assets of the spouse that brought them to the marriage upon divorce. Premarital agreements can be effective as to specific assets, but present a practical problem in negotiating an agreement with your soon-to-be spouse and in handling the assets in such a manner to preserve their status as separate property. If you do not want to dim the feel of love by negotiating with your future spouse, consider a Prenuptial Trust. The safest method is to use both a Premarital Agreement and Premarital Trust.
Business Structures Can Provide Some Protection
For Oregon family owned businesses or high worth professionals, methods of asset protection, combined with a family limited partnership or a limited liability company, are used for an additional layer of protection. However, in certain situations asset protection can be lost. Creditors can attack the limited partnership interest where partnership interests are subject to fraudulent avoidance statutes, or through a creditor obtaining a judgment and stepping into the shoes of the debtor and potentially judicially foreclosing on a partnership interest. First, a debtor cannot transfer individual assets to a limited partner or limited liability company when there is a pending claim unless they provide for the existing claims. Such a transaction would constitute a fraudulent conveyance and would provide no protection. However, in Oregon, a creditor can obtain a charging order against the debtor’s share of the limited liability company and obtain the rights of assignee of the membership interest. If the charging order is against a limited liability company, in Oregon, the charging order constitutes a lien on the debtor’s transferable interest and a court may order foreclosure of the interest subject to the charging order. The purchaser at a foreclosure sale would have the rights of a transferee and their interest could be redeemed by having the debt paid off. Further, to the extent that the debtor files for bankruptcy, courts which have addressed the issue have disregarded any charging order protection and foreclosed directly on the interest of the debtor in the limited liability company.
Salem Oregon Asset Protection Attorney Comes to You
Most Oregon and Washington residents are very busy people. Whether you have a full time job, own a business, freelance, or are a full time stay at home parent, you days are probably full with either job or family obligations. Not only do you not want to discuss estate planning, Wills, Trusts, asset protection because of the nature of the subject, but because of your time constraints you have a good excuse not to make time to get a Will or Trust, or take steps to protect your family by protecting the wealth you have worked all your life to achieve.
Since the majority of my clients are either extremely busy or it is hard for them to travel, I have set my law practice up to go to my clients. Whether it is your office, a meeting room, your home, or the neighborhood coffee shop, I will come to you. In addition, I accept evening and week-end appointments for your convenience.
How do I get started on my asset protection plan?
If you are a business owner, doctor, dentist, attorney, financial advisor or other professional, or you have accumulated a reasonable amount of assets and you are worried about leaving your assets to a person who you are concerned will lose his or her inheritance, take advantage of our free risk analysis consultation, now before you have a problem. Remember, asset protection can only be accomplished before a problem occurs, it does not work after the fact. If you live in Salem Oregon, Portland Oregon or the surrounding area, call me, Russ Pike, at 503.888.0952 for a free consultation.