Asset Protection for Your Spouse, Children, and Even Grandchildren

Creditors, Predators, and Inadvertent Disinheritance

Asset protection planning attempts to organize the ownership and location of your property in such a manner as to make it as difficult as possible for assets to be lost to the three biggest destroyers of wealth: lawsuits, bankruptcy and divorce.

A legal judgment against you, your family, or your heirs can result in a creditor acquiring your property in satisfaction of the judgment. Without proper asset protection planning, the court could award ownership of your home, your investments, etc. to a creditor. The same holds true in bankruptcy proceedings. Your estate plan may be created to prevent a bankruptcy declared by your spouse or your children from depleting your family’s assets.

Any business owner, someone with a substantial estate, and professionals subject to malpractice claims must consider the benefits of asset protection planning sooner rather than later. Planning of this nature must be done prior to known liabilities, whether actual or possible, arising, as well as already entered judgments. Efforts to re-title assets to shield them from such liabilities or entered judgments are generally discovered by the court, cannot be protected, and are subject to loss.

Image of strangersIn estate planning, assets are structured so as to protect them from erosion by the actions of your loved ones or of those they become involved with. In far too many cases, a second spouse of yours or a spouse of your child gains control of your life’s work, and then arranges for that wealth to pass on to heirs that you do not know or ever met. Risks of this happening can be reduced. For example you can require your spouse to sign a pre- or post-nuptial agreement with their new spouse as a requirement for receiving money from your estate. This has the additional benefit of taking this undoubtedly uncomfortable discussion out of your surviving spouse’s hands – they MUST sign one of these agreements in order to receive money from your estate.

Think of the case of Anna Nicole Smith – she married an incredibly wealthy oil baron and when he died, his son sued. Now the fight is over whether Anna’s daughter should receive any of the money. If Anna’s husband had taken the proper steps in estate planning, there would have been no question as to what amount Anna would have gotten and what amounts his other children would have gotten. Without planning of this nature, there’s a very real chance your own children or grandchildren could end up disinherited from your estate!

Image of divorce decreeSimilarly, a divorce can deplete your child’s assets. Since the divorce rate in California is over 50% and this is a community property state, chances are unfortunately high that this will become an issue. Imagine your daughter or son marrying sometime before or after you have passed away (you having not taken the proper steps) and she co-mingles her portion of your estate with her new husband’s assets, either intentionally or not. If they later divorce, he will have a claim on up to 50% of what you left her! Your estate plan can protect those assets from such things occurring.

Wealth Counsel

Wealth Council



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Steven M. Greenwood, P.C.
2801 Townsgate Rd., Ste. 210
Westlake Village, CA 91361

805-277-5020 - Phone
805-277-5021 - Fax

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