YAHNIAN ASSET PROTECTION PLANNING

The Asset Protection Planning Attorney/CPA/CFP® Advantage℠

D. STEVEN YAHNIAN, ESQ
Attorney/CPA/CFP®

  • JD (Loyola of Los Angeles Law School)
  • LLM (Tax-NYU)
  • MS (Taxation-UCLA)*
  • CERTIFICATE (Tax-UCLA)
  • BS Accounting (USC)

Certified Specialist by California State Bar Board of Legal Specialization:
– Estate Planning, Trusts and Probate Law
Taxation

*Equivalent

Asset protection planning is a subset of Estate Planning, But, it also involves Business Planning, Tax Planning and Financial Planning.

It is a specialty area of the law that addresses key financial, tax, business and estate concerns.

Asset Protection planning asks:

  • What are the best ways to organize one’s business, tax  and financial affairs to minimize liability and lawsuit risks, or if a lawsuit does arise, which methods are both legal and will withstand creditor attack?
  • What planning options and strategies are available to insure that accumulated wealth and future earnings are insulated and shielded against potential loss?

Asset protection  begins with a through evaluation of the business and personal liability risks faced by our clients.

A substantial aspect of asset protection planning is devoted to organizing and reorganizing business structures and advising clients how to take full legal advantage of the limited liability protection available through the proper and creative use of available strategies. This would include optimal use of state and Federal exemptions for assets and strategic use of insurance.

Accumulated personal assets, including business and real estate properties and other investments should be protected from liability risks to the greatest extent possible. As a compliment to asset protection planning, effective estate planning principles should be applied to create an integrated personal plan to minimize business risk and protect personal assets from sources of potential liability.

As a further answer to the question, asset protection planning is a process by which one organizes their financial affairs in such a manner as to safeguard assets from the risk of exposure. The process of asset protection involves transferring the assets from an unprotected form of ownership to a protected form of ownership. The unprotected form generally applies to property held directly in an individual’s name or even in the name of a revocable living trust. Revocable Trust generally do not give asset protection.

The protected form can be one of many asset protection vehicles such as limited partnership, corporations, certain kinds of trusts, limited liability companies and other such entities. Protecting assets can also be a process of transferring them into exempt assets to the extent permitted by the individual states.

There are many methods that individuals can use to shield assets from debt collection. Rudimentary asset protection involves using statutory exemptions from debt collection to the greatest extent possible. In California, however, the only secure exemption of any significant amount is for certain retirement plans; other exemptions are greatly limited.

Asset protection can be combined with estate tax planning. For instance, limited partnerships or LLCs are often used to consolidate assets and transfer substantial interests to heirs, while providing a discount in the value of the underlying assets. At the same time, debt collection against partnership assets is cumbersome.

Long-term asset protection also involves asset-protection trusts. In California, a settlor cannot establish an asset-protection trust for the settlor’s benefit, as a general rule to and obtain protection of those trust assets (but see California Private Retirement Trusts). To be effective, the trust must be created by another party, such as a parent or grandparent. Accordingly, it is appropriate to ask clients with children whether they want to provide asset protection for their children. Similarly, clients whose parents have significant assets may be informed that parents can leave assets to them in a manner designed to foster asset protection. There are several different types of asset-protection trusts. Substantial assets also can be disposed of through a dynasty trust, which is designed to be free of the claims of most creditors and wealth-transfer taxes indefinitely. Foreign trusts can be used to protect substantial assets and are highly effective if funded and maintained properly.

Many asset-protection plans involve more than one of these devices. Regardless of the type of asset-protection plan adopted, the fraudulent transfer laws must always be taken into account as the plan is devised and implemented.

What’s the Difference Between Asset Protection and Estate Planning?

Asset protection planning is the process utilizing various techniques, analysis and strategies to proactively protect assets from creditors. Many of he same planning and documents used in Estate Planning are also used in Asset protection planning, but are more complex and encompassing. Financial planning and estate planning result in asset protection. Once you have integrated your financial goals with your estate planning goals and positioned or repositioned your assets to be protected from creditors, you will have a comprehensive asset protection plan in place.

By contrast, Estate planning is the manner in which your assets are passed to heirs, while minimizing taxes.

We recommend that everyone have an asset protection plan. Why is this?

  • To protect your home and other assets
  • To protect and ensure the succession of your business
  • To protect your spouse
  • To protect your children
  • To protect other persons you care about
  • To provide protection of your assets against the IRS
  • To provide protection of your assets from creditors
  • Business owners
  • Doctors,
  • Dentists
  • Chiropractors
  • Mental Health professionals
  • Health Care Professionals
  • Real Estate Investors
  • Attorneys
  • CPAs
  • Architects
  • Engineers
  • Other professionals
  • Those with substantial wealth
  • Those engaged in dangerous activities that may result in harm to others

“There is no ‘one-size-fits-all’ asset protection plan. Many plans and planning tools work well for a majority of clients. Some work well for many clients. Others work well for only a few. Only an experienced attorney knows the difference and how to design, prepare, implement and operate a customized asset protection plan.” STEVE YAHNIAN, Attorney/CPA/CFP, Yahnian Law Corporation

  • First, is:
    • interview;
    • ascertain client objectives;
    • gather information;
    • review client answers to asset protection planning questionnaires;
    • review documents;
    • ascertain and distill relevant facts;
    • organize facts,
    • factual and legal analysis,
    • Asset Proetection Planner written opinion, blueprint and recommendations.
  • Second, is plan preparation.
  • Third, is plan implementation; and
  • Last, is plan monitoring following implementation.
  1. Own as little as possible in your own name, personally
  2. Have a working knowledge of Fraudulent conveyance Law, Creditor’s rights and powers  and Bankruptcy law
  3. Use Separate Legal Tools as part of an overall plan
  4. Use LLCs to operate businesses and own assets
  5. Separate assets from operations by the use of multiple LLCs and leasing agreements
  6. Use Corporations in only some circumstances and NEVER put real property or other valuable and appreciating assets into a Corporation;
  7. Create and Operate an Asset Protection Trust
  8. Use Trust Protectors
  9. Don’t forget the tax aspects
  10. Plan and implement asset protection strategies long before creditor claims arise
  11. Don’t Show off your wealth
  12. Buy as much insurance as  you can reasonably afford
    •  Liability insurance
    • Property and Casualty
    • Life
    • Disability
    • Auto

We provide a wide-range of customized and strategic asset protection plans.

We follow a pattern in doing so consisting of the following:

  • Factual Analysis
  • Review of the possible alternatives
  • Design the appropriate plan
  • Documentation
  • Implementation
  • Monitoring
  • Amendment where appropriate

Each of the plans we prepare is tailored to client objectives and circumstances. One objective is to minimize or avoid creditors, where legally feasible.

Preparation and implementation of asset protecting  must be carefully planned. Asset Protection Planning law has many intricacies. Having an experienced asset protection, business, tax,  trust and estate attorney with a CPA and a CFP  who also  knows accounting and financial planning  is integral to creating an asset protection plan that is feasible and effective.