Clients often ask what steps can be done to protect their assets. My typical response: “what type of asset protection are you interested in?” Most clients aren’t quite sure how to respond… they are unaware that there are different types of asset protection available. The 3 most common types of asset protection I help clients with are:
- Asset Protection from Medicaid. Medicaid is a health program administered through the states. Missouri’s version of Medicaid is called Mo HealthNet. Medicaid provides very valuable care for those with limited financial resources. This is often the case with elderly individuals who go into a nursing home. Since nursing home care is expensive (thousands of dollars per month), elderly individuals are often very interested in steps they can take to protect some of their assets for their loved ones. The most common tool we use for this is called a Medicaid Asset Protection (MAP) Trust. One common use of a MAP Trust is to protect real estate so that it passes to a client’s children instead of having a lien placed on it by Medicaid.
- Asset Protection from Business Liabilities. Most business owners have the fear of “What if…”. “What if my employee does something and as a result I am sued?” “What if my product injures someone?” “What if a customer is injured on my property?” The answer to those “What ifs” is to plan. Part of that planning is certainly insurance. Yet, another part is structuring your business (businesses) the correct way to minimize liability. Whether your business is an LLC, S-Corp, or C-Corp, there are steps we can take to minimize an owner’s personal liability for business incidents.
- Asset Protection from Lawsuits. Almost daily you hear about someone getting sued. Sometimes the claims have merit. Other times the claims are frivolous and a waste of time, energy, and money. Planning ahead is important to minimize your personal liability. Especially if you are in a higher risk profession (doctor, pharmacist, lawyer, etc.), planning today is critical for asset protection tomorrow. This planning ranges from the simple (titling assets or establishing LLCs) to the complex (offshore trusts with professional trust protectors).
Protecting assets is doable… the initial steps are straight forward and simple… the key is asking the question and getting started before you need it. There is no silver bullet for asset protection. Instead, think of it as layers of protection. Get started building your layers of asset protection today.