Thursday, January 18, 2018
Business

Act now to safeguard your assets

How can people with significant assets protect their wealth?

The short answer is that someone's money can never be completely protected from creditors, but there are steps that can be taken to discourage people from pursuing you.

"There is no such thing as asset protection," said Jason Cain, head of the family wealth planning group in the central region for Credit Suisse Private Bank. "What there is, is good business and estate planning that as a byproduct insulates your assets from future, potential creditors."

While this may sound like the realm of just the truly wealthy, asset protection is something that people with a nice home and a couple of cars should consider, particularly if they can imagine being sued. So how should people think about what they might need?

Umbrella policy: Insurance is the first level of protection. After the necessary home and auto policies, the most crucial thing is to have an umbrella policy that limits liability. Think of it as protection against the unexpected, like someone falling down your stairs or being hit by the car driven by your child.

"We view lawsuits as probably the most dangerous thing that our clients face," Jeremiah Hourihan, executive vice president at Chartis Private Client Group, said. "The No. 1 risk is a car accident where you or a family member causes harm to someone else. Those are the most frequent incidents we see."

He said the company's most common liability policy was for $10 million. Depending on how many homes and cars people have, he said, it generally costs about $2,000 to $3,000 a year for $10 million in umbrella coverage. He said yachts, boats or Jet Skis increased the cost.

These policies can also be written to include separate coverage for legal fees from a lawsuit as well as to protect people who serve on nonprofit boards and fear the group's coverage is inadequate if they are sued, Hourihan said.

Trusts for heirs: Money put in trusts for heirs is another way to shield assets.

People who work in certain professions, like lawyers, architects and engineers, also face liability by the nature of their work. They could be named as a party in a lawsuit, even if they did nothing wrong.

In this, doctors are a category of professionals uniquely at risk. Cain said he made a point of telling physicians that they needed to have their strategy in place long before there was a lawsuit.

Many asset-protection strategies fail because they are created at the moment someone is being sued or fears a lawsuit is coming. Done that way, they run the risk of being considered a fraudulent transfer and disallowed.

Asset-protection trusts: The truly rich have the option of setting up asset-protection trusts in states like Alaska or Delaware that have laws allowing these shelters, or can go to offshore jurisdictions, like the Cayman Islands.

The onshore versions are relatively new, with most dating to the 1990s. Because of this, they have not yet been legally tested. Heather Flanagan, senior wealth planner at PNC Delaware Trust Company, cautions clients to use these trusts as true shelters.

Amy Jetel, a partner in the law firm of Beckett, Thackett & Jetel in Austin, Texas, said she counseled people who have at least $3 million to put that much in an asset-protection trust offshore to make sure the assets are beyond the reach of United States creditors.

She said that the cost, about $25,000, to set up one of these trusts was the same offshore or onshore (though the tax-reporting costs are higher offshore).

Comments
Crystal Lagoon planners cut the ribbon on a chilly day (w/video)

Crystal Lagoon planners cut the ribbon on a chilly day (w/video)

WESLEY CHAPEL — Mother Nature seems to have a way of putting a chill on one of the hottest amenities in residential real estate development.Members of the business community, elected officials and executives with Metro Development Group and Crystal L...
Updated: 3 hours ago

Consumer agency to spend rainy day funds

NEW YORK — The Trump-appointed acting director of the federal government’s consumer watchdog agency requested zero dollars of funding for its second-quarter budget, saying he intends to first spend down the agency’s rainy day fund. In a letter to the...
Updated: 3 hours ago
Tampa Bay area doesn’t make cut as Amazon second headquarter finalist

Tampa Bay area doesn’t make cut as Amazon second headquarter finalist

To no one’s surprise, Amazon on Thursday released its list of location finalists for its second headquarters, and neither Tampa nor St. Petersburg was on it."We knew it was going to be a long shot and a difficult road," Tampa Mayor Bob Buckhorn said....
Updated: 8 hours ago
Trump tweets create confusion on GOP plan to avert shutdown; Ryan tries to calm Republicans

Trump tweets create confusion on GOP plan to avert shutdown; Ryan tries to calm Republicans

WASHINGTON — The White House said Thursday that President Donald Trump supports a short-term spending bill to avert a government shutdown, as eroding support for the measure among Senate Democrats and some Republicans increased the prospects of a clo...
Updated: 8 hours ago

Deal clears way for Oldsmar townhomes

OLDSMAR — The City Council voted 4-1 last month in favor of approving a development agreement for a 50-unit townhome community on a nearly 4-acre parcel on St. Petersburg Drive. According to the terms of the agreement, Oldsmar Towns LLC will build a ...
Updated: 9 hours ago
Here are Tampa Bay's priciest home sales in 2017

Here are Tampa Bay's priciest home sales in 2017

If there’s one word to describe the buyers of Tampa Bay’s 25 priciest homes in 2017 it’s this: eclectic. As in previous years, the group included doctors, lawyers and professional sports figures — three of the homes were purc...
Updated: 10 hours ago
Ace Hardware in Oldsmar has those hard to find home items

Ace Hardware in Oldsmar has those hard to find home items

When Vision ACE Hardware opened in Oldsmar last November, the very first customer came in looking for a light bulb that he couldn’t find anywhere else."We had that lightbulb," said Stone Ackroyd, marketing manager. "That’s what ACE does. We have thos...
Updated: 12 hours ago
Mellow Mushroom opens third locationin Wesley Chapel

Mellow Mushroom opens third locationin Wesley Chapel

LUTZ — Mellow Mushroom opened the doors to its new location this week in Wesley Chapel.This is the third location for owner Rob Johnson, who opened the Mellow Mushroom in Brandon 12 years ago, and then expanded to Clearwater.Johnson began looking at ...
Updated: 12 hours ago
Sweets, savories and surprises at Jules’ Place in southeast Seminole Heights

Sweets, savories and surprises at Jules’ Place in southeast Seminole Heights

Tampa native Julie Harris worked for the City of Tampa for 22 years, under four mayoral administrations, until retiring as director of communications and neighborhood liaison in 2003.Her familiarity with Southeast Seminole Heights and countless conta...
Updated: 12 hours ago
Popular Spanish cuisine restaurant joins Hyde Park food scene

Popular Spanish cuisine restaurant joins Hyde Park food scene

HYDE PARK—Featuring popular Spanish cuisine, Bulla Gastrobar compliments Soho and Hyde Park’s vibrant restaurant scene offering an authentic Madrid-inspired tapas dining experience to be shared among friends for brunch, lunch and dinner. "Tampa is gr...
Published: 01/18/18