Attorneys at Rarick, Beskin & Garcia Vega have over six decades of experience in both private and public legal work. Meet Our Attorneys. Attorneys in our firm focus their work on a range of inter-related disciplines: estate planning, asset protection, probate, guardianship, and trust administration.
Miami Lakes Estate Planning & Asset Protection
Estate & Asset Protection Planning
Estate planning that focuses simply on estate planning may miss one-half of a family’s needs. The other half is asset protection. Rarick, Beskin & Garcia Vega, P.A. focuses on integrating your estate planning needs with a strong plan to protect your property and savings.
A primary theme of our practice is to keep our clients out of court. We provide legal advice for all sizes of estates, from the very modest to multi-million dollar estates. Our integrated estate and asset protection planning has three fundamental goals:
- Keep legal control in the family — and avoid a court stepping into you personal financial or family affairs.
- Protect your property and savings from lawsuits.
- Give what you have, the way you want — at the least possible cost — saving as much as taxes, court costs and attorney’s fees as possible.
To accomplish these goals, we provide a wide range of powerful legal tools, such as:
- Living Revocable Trust
- Credit Shelter Trust (or A-B Trust)
- Will, including Pour-Over Will
- Life Insurance Trust or irrevocable trust, ILIT, (to protect life insurance policies from taxation)
- Florida Durable Power of Attorney
- Florida Living Will
- Florida Health Care Surrogate
- Special Needs Trusts
- Qualified Domestic Trust (if spouse is not a U.S. citizen)
- Limited partnership, and LLLP (limited liability limited partnership)
- Limited Liability Company: To protect rental properties, vacation homes, etc.
- Nevis Island limited liability limited company (off-shore planning)
- Cook Island Trust (off-shore planning)
In our litigious society, a single lawsuit can destroy your life savings. You may have insurance — auto insurance for example — but most personal injury attorneys will seek to name you personally and get a money judgment over and above insurance policy limits if damages are substantial.
You can strike back with integrated estate and asset protection planning, which is designed to accomplish two fundamental goals critical to every family: protect your assets and keep legal control in your family. Like a puzzle where all the pieces fit, your estate plan should be in sync with your asset protection plan. Here are some basic questions, answers and solutions.
Note: This planning is not based upon secrecy. Any planning based upon secrecy is doomed to failure due to our expansive discovery rules. In fact, at the appropriate time, you may want to advise the claimant of your asset protection plan because it may offer a creditor a powerful incentive to settle or dismiss.
1. Do I Need Asset Protection Planning?
If you have substantial assets, provide professional services, or simply have a business where you can be personally sued, the answer is YES. Situation A: You are driving an automobile and have an accident severely injuring another person: you will likely be personally sued if there is the slightest evidence of fault caused by you. Situation B: You have a small business with five employees. You ask the employee to go to the bank on a routine errand. On the way to the bank, the employee is involved in an auto accident, severely injuring a pedestrian. It is very possible that you will be sued together with your business.
2. What is Integrated Estate Planning and Asset Protection?
This is a term coined by attorney Barry S. Engel, one of the country’s leading experts in asset protection. First, it may be helpful to identify what it is not. It is not a means to hide assets to facilitate tax evasion. It is not transacting fraudulent transfers against creditors. It is structuring your estate plan and assets when the waters are quiet — before you have been sued – in a consistent plan that makes your exposed assets a highly unattractive target for any creditor to pursue. It gives you the advantage to encourage a plaintiff or creditor to settle within insurance policy limits, or to settle at a great discount, or simply not sue you in the first place.
3. Does My Revocable Trust Provide Any Asset Protection?
Good estate planning starts with a living revocable trust as the master plan and foundation. This key legal tool, together with a strong durable power of attorney, health care surrogate, living will, and pour-over will are essential to help you keep legal control in your family, and not have a judge step into your personal and financial affairs. However, the revocable living trust does not protect your assets from creditors.
4. I Already Have A Corporation For My Business; Isn’t That Sufficient?
If you have a business, it is usually important that you incorporate it so that you have the advantage of the corporate veil to protect your personal assets from the debts of the corporation. (If you do not have a corporation for your business, we really need to talk.) Incorporation is a cheap form of insurance — if you follow the corporate formalities. But, here’s the rub. We have reviewed many corporate books in the course of providing estate planning advice. Few have done the basic legal work to insure that the corporation is in fact a corporation. Of course, most plaintiff attorneys know this, and use it to try to pierce the corporate veil to go after your personal assets. Simply having a corporation for your business, however, will not protect your assets outside the corporation. You may need another layer of protection for those “Exposed” personal assets.
5. I carry significant liability insurance; why do I need Asset Protection?
If you are a “deep pocket”, plaintiffs routinely seek to go beyond your insurance coverage and attack you personally. This is a primary characteristic of the aggressive litigation society we live in today. Further, if you examine your policy closely, you will find many exceptions; specifically, you will find your policy does not cover punitive damages or intentional wrongdoing. You really don’t know what your insurance protects until you are sued.
6. What Are My Options?
Asset protection options vary in terms of quality and of course costs.
Solution #1. LLC: Florida Limited Liability Company
LLC’s are one of the most popular planning tools for protecting your assets. They are more flexible and more difficult to penetrate than S corporations. Florida law gives creditors limited remedies against an LLC interest. Assuming the LLC has a well drafted operating agreement — see Note below – a judgment creditor is limited to a “charging lien” against LLC cash distributions. If the LLC manager (you are usually the manger) decides not to make a distribution, the creditor stands on the sidelines and receives nothing. On top of this, the creditor could be liable for taxes on the LLC interest even though the creditor receives no distributions. These features make the LLC an effective asset planning tool.
Note: Numerous companies offer to establish an LLC for you at $250 or less. Avoid these schemes. The “guts” of the LLC is a robust asset protection operating agreement which must be drafted by a Florida attorney. Anything less is false security.
Solution #2. FLLLP: Family Limited Liability Limited Partnership
A step up the asset protection ladder is a FLLLP: the technical name is a mouthful — family limited liability limited partnership. The FLLLP is a powerful legal tool that offers multiple benefits, such as minimizing estate taxes and making gifts to children without giving them cash or any control. However, another major benefit of the FLLLP is asset protection. The FLLLP is often used as an umbrella or holding company over family entities, adding a second layer of protection that is extraordinarily difficult to penetrate for any would-be creditor. For more information about the FLLLP, ask us to send you our paper called, “Benefits of the FLLLP”.
Solution #3. Irrevocable Grantor Trust — IGT
The IGT is not a stand-alone solution to asset protection, but when used in conjunction with an LLC or FLP it is a way to protect assets for the benefit of your spouse, children, or grandchildren. Under a properly draft IGT, assets owned by the IGT are virtually unreachable by creditors.
Solution #4. Nevis Island Limited Liability Company
An increasingly popular off-shore jurisdiction is Nevis Island, since it has enacted strong LLC laws similar to our Florida statute. To attack an interest in a Nevis Island LLC, a creditor has to go to a Nevis court to get a charging lien. It is unclear whether a Nevis Court would even recognize a Florida judgment: officials in Nevis have told one commentator they know of no instance where a U.S. creditor has obtained a charging lien in Nevis to enforce a U.S. judgment. Using a Nevis LLC, you can retain control of your assets as the LLC manager. You can invest anywhere in the world. You can use a Nevis LLC to hold your U.S. bank accounts, or if you like, you can invest in a Swiss or London bank, or any bank in the world.
So where is this place? Nevis Island is located southeast of the Virgin Islands. It is part of the Federation of St. Kitts and Nevis. It is an active member of the British Commonwealth and United Nations. It has a stable democracy based upon British law.
Solution #5. Cook Islands Trust
In 1984 the Cook Islands ushered in the modern asset protection era, and has remained the premier jurisdiction. The highest quality of asset protection is probably a combination of a Nevis Island LLC and a Cook Islands Trust. The Nevis Island LLC would have a pull-the- plug provision that would transfer assets to the Cook Islands. Properly structured and administered, no court in the United States will have power to undo the plan. The Cook Islands are a cluster of 15 islands located northeast of New Zealand. They are a self-governing parliamentary democracy in free association with New Zealand.