Asset protection has burst onto the stage. The explosion in the litigation industry, capricious legislative bodies, and the volatilities of the financial markets and economies have evoked a powerful response. In modern society, threats to individual wealth through litigation arise across the full range of contract and tort law. Debtors often can be surprised by the extent of this exposure and the reaches of creditors. For example, unexpected risks can derive from the financial failure of a partner or business associate, the judicial interpretation of a guaranty beyond its intended scope, or simply from the size and amount of damages awarded in business litigation judgments.
BALYEAT + LANE, LLC is attuned to the potential consequences of these legal, economic, and political threats. In order to help and assist our clients protect their wealth from depletion by virtue of these threats, we provide our client sophisticated asset protection planning. This planning optimally involves aggressive, "multiple-entity" structures that include the use of limited partnerships, corporations, trust arrangements, foundations, retirement plans, life insurance, and the like. While multiple entity structures enable both tax planning and orderly wealth transfer, they also facilitate the additional benefit of asset protection. "Multiple-entity" planning dictates that wealth should be segregated and placed in isolated, sheltered compartments, with each compartment legally and physically unconnected to the other, thus preventing claims against one entity from affecting the others. Opportunities for this planning abound in domestic legal vehicles such as corporations, limited partnerships, limited liability companies, limited liability partnerships, trusts for the benefit of third parties, retirement plans, life insurance, annuities, homesteads, spousal arrangements, inheritances, and foundations. Permutations and combinations of entities and venues offer even more asset protection. For example, one should segregate passive assets from those with greater intrinsic liability exposure (e.g., compartmentalize listed securities in an entity that is separate from a general business entity) and segregate the categories of the latter from themselves (e.g., create separate limited partnerships for parcels of real estate, each of which has its own inherent risk or liability). When added to this form of domestic planning, the foreign solution of an offshore trust represents yet another protective compartment.