How Asset Protection and Estate Planning Interacts with Real Estate Holdings

Real Estate is one of the most common assets in investment portfolios. It is important to know how to protect such assets as well as plan for this disposition at your death. Accordingly, an individual’s Estate Plan and Asset Protection plan must account for real estate holdings. As an overview, Asset Protection is defined as the legal process of protecting assets using domestic and international strategies to put them beyond the reach of future potential threats and creditors and Estate Planning is the legal process of planning for the disposition of those assets at death.

Asset Protection strategies include the formation of holding companies that keep assets that create liability away from non-liability producing assets (such as cash, checking and savings). Any property other than your personal residence should almost always be owned by an LLC. Your personal creditor cannot claim properties owned by an LLC because you do not own the property personally. A good plan titles each property to a separate LLC. Real Estate (except for your primary residence) should always be owned by a limited liability company. For example, if you own five (5) rental properties, title each property to a separate LLC.

Further, Asset Protection without Estate Planning is incomplete planning. Integrated planning includes combining Asset Protection strategies with Estate Planning strategies to protect assets during lifetime and ensure that they end up with intended beneficiaries at death. An individual’s Estate Plan is coordinated with their Asset Protection (along with a Business Succession Plan). Integrated Estate Planning allows an individual to anticipate future potential issues that may affect their business and/or personal assets and create contingency planning for them.

Contact The Presser Law Firm, P.A. if you or a loved one is interested in having an estate plan prepared. Our attorneys are knowledgeable in estate planning, asset protection and business law.