Are there other protective options besides the Limited Partnership, International Trust or LLC?
As with any type asset, there are multiple protective options. For instance,
a few states with tenancy-by-the-entirety laws protect spousal co-owned
investments from creditor claims against one spouse. Florida is one such
state. But it’s important that every asset (bank accounts, portfolio,
etc.) be properly titled to gain this protection. Some spouses prefer
to title their investments to the less vulnerable spouse. We think that
this is poor planning for the same reason that titling the home and other
real estate to one spouse is less than optimum. It creates estate planning
difficulties and does not always safeguard the assets titled to that one
spouse. A few of our clients have transferred their assets to irrevocable
domestic trusts. This has the decided disadvantage of lost control over
the transferred asset. It can also trigger gift taxes and other unwanted
consequences. But for some people the irrevocable trust can provide counter-balancing
estate planning, tax planning or charitable gifting benefits. We can talk
more about trusts when we discuss ways to shelter one’s estate.
As with any asset – you need
your one best strategy.