If you own a business in this state, a home, or anything of value, you could be targeted by unscrupulous creditors or groundless lawsuits. In Oklahoma, the first step in effective asset protection is consulting an Oklahoma City asset protection lawyer.
If you own any significant assets, you could become a target for an unexpected lawsuit, and if your liability insurance can’t or won’t cover you, your assets and properties may be at risk. You must have the maximum legal protection that is available to you for your assets and properties.
By taking several legal steps – before your assets are threatened and with the advice of an Oklahoma City asset protection attorney – you can effectively shield your properties and assets from creditors and lawsuits. Keep reading this short introduction to asset protection to learn how.
What Can You Do to Protect Your Assets?
Asset protection reorganizes what you own to shield your assets against creditors and lawsuits. It changes the legal owner of your property and assets, or it changes the location where you own properties and assets, in order to protect what you own from judgment holders and creditors.
You can’t know what is necessary to safeguard your assets until you decide which assets need protection. You can put legal barriers between those assets and yourself, or you can create a legal structure that limits your liability and then transfer your assets into that legal structure.
When you meet with an Oklahoma City asset protection lawyer, that lawyer will identify those properties and assets that are already protected by law, and then your lawyer will show you what steps to take in order to safeguard your remaining assets and properties.
What Strategies Are Best for Protecting Your Assets?
There’s no single strategy for protecting assets that works for everyone. For most of us, asset protection starts with buying insurance coverage. However, an insurance policy alone probably cannot offer the full asset protection you may need.
An LLC (limited liability company) or a trust can provide the maximum legal protection for your properties and assets. After reviewing your circumstances and needs, an Oklahoma asset protection lawyer can determine if you need to establish an LLC, a trust, or both.
Is an LLC Right for You?
An LLC shields its owners (known as “members”) from any personal liability. If you are the owner of a partnership or sole proprietorship, setting up an LLC can shield your personal properties and assets from liability claims and creditors.
In Oklahoma, moving your properties and assets into an LLC is a particularly effective move for business owners, landlords, and real estate investors.
How Do LLCs Shield Your Personal Assets?
An Oklahoma City asset protection attorney will show you how to transfer properties and assets into your limited liability company and explain the tax implications. As an LLC member, your property and assets may be transferred to your LLC:
- To capitalize the business: Your transfer may be real estate, cash, personal property, or all of these. In return, you have equity in your LLC.
- To protect your properties from liability: Your LLC will protect your properties and assets from creditors and liability claims.
One effective strategy for protecting properties is transferring their ownership to a holding company, which is typically a limited liability company. Your holding company can legally own the property while being legally separate and distinct from you and your personal finances.
If the properties and assets you own are extensive and complicated, an asset protection lawyer may recommend setting up several LLCs that are interconnected or transferring your assets and properties to an irrevocable trust.
What Are Trusts?
A trust is a legal and financial arrangement spelled out by a trust document that you create with your attorney’s help. A “trustor” (which would be you) sets up the trust and chooses a “trustee” to hold the title to the trustor’s assets and properties on behalf of one or several beneficiaries.
Different kinds of trusts are created for different goals. Your trust may protect your assets from lawsuits and creditors. Additionally, it may reduce your tax burden or let your beneficiaries and estate avoid probate after you pass away.
When you create your trust, your assets and properties may be moved to and owned by the trust while you’re alive. After your death, the trustee you chose will have obligations similar to the obligations of the executor of a will, but without interference from an Oklahoma probate court.
What Kind of Trust Protects Your Properties and Assets?
As mentioned above, different trusts accomplish different goals. Trusts created for asset protection are “irrevocable,” meaning that the assets and properties transferred into the trust stay there throughout your lifetime. Most irrevocable trusts are created primarily to protect assets.
While the assets and properties that you transfer to an irrevocable trust are yours to use and enjoy – for example, you may still stay at your cabin in the woods when you take your vacation – the trust is the “legal” owner of any assets and properties transferred to it.
Taking your assets out of your ownership shields your assets from collection activities and lawsuits. You’ll work with your Oklahoma asset protection lawyer to decide which assets and properties should be transferred into your irrevocable trust.
When Should You Act to Protect Your Assets?
In Oklahoma, you must take steps to protect yourself before a creditor or a lawsuit puts your properties and assets at risk. Act now. Schedule a meeting with an Oklahoma asset protection attorney before your assets and properties are threatened.
If you move an asset or a property to evade a collection or a pending lawsuit, the transfer will be what the law calls a “fraudulent conveyance.” The transfer will be voided by a court, while your properties and assets will still be at risk.
How Can You Learn More?
Protecting your properties and assets means putting them legally beyond the reach of lawsuits and creditors. An Oklahoma asset protection attorney will assist you, and you can ensure that a creditor or lawsuit doesn’t take everything you have.
We can’t know the future or what it may bring. That is why the time to protect your properties and assets is now.
If you own a business in Oklahoma, a home, or anything of value, you can learn more about your asset protection options, or you may begin protecting your properties and assets immediately by scheduling a consultation with an asset protection lawyer in Oklahoma City.