There are literally hundreds, or even thousands, of ways to shield your
assets. There are many more entities we could discuss in one blog post,
but most entities and strategies, conceptually at least, fall within one
of these eight 'firewall' categories.
- 1. Federal and state exemptions
- 2. Co-ownerships
- 3. Corporations
- 4. Limited partnerships
- 5. Limited liability companies
- 6. Domestic trusts
- 7. International entities
- 8. Debt-shields (equity stripping)
One asset shield or firewall is not necessarily better than another, each
tool has its place and purpose. Firewalls can also be combined to give
stronger protection in a given case. Each specific firewall brings unique
characteristics, strengths and weaknesses, advantages and disadvantages,
applications and instances where they would or wouldn't be useful.
Think colors on the artist's palette. Some colors are more commonly
used than others; however, each is vital to achieve artistic perfection.
But like any great work of art it all depends on the correct application.
Since we can't fully discuss
every possible firewall or get too technical with when to apply them. We are
just sharing the more common tools and strategies.
More advanced methodologies may combine legal and financial strategies.
These invariably complex arrangements can provide financial as well as
protective benefits. Asset Protection planning is never a static exercise.
As professional Asset Protection Planners, we constantly invent new strategies
and tactics as rapidly as the collection lawyers try to find ways to overcome
our older strategies.