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1. Take steps that lead to payment of no tax via real estate gains
exemptions and deferrals and estate tax exemptions and discounts.
2. Understand and use insurance wisely.
3. Segregate your assets so liability that arises from each reaches
only that asset.
4. Reduce the value of your estate to below the exemption amount
as you go along by the use of entities and discounting.
5. Gift creatively and to the maximum. Yearly gift through a FLP
or LLC without giving.
6. Put your retirement funds to work for you in real estate w/self
directed accounts.
By attacking both estate taxation and lawsuit taking, asset protection
plans have evolved as a holistic means of responding to the many
sources that threaten our assets. Just as the living trust has evolved
to replace the will, assets protection is evolving to take the place
of unlimited, unsheltered liability.
An asset protection plan is designed to segregate and insulate
assets so that only the assets which produce the liability are vulnerable.
For example, when rental real estate insulated in a limited liability
company produces a liability, any resulting judgment is against
the limited liability company, not against you. Your other assets
are safe. A valuable side benefit of asset protection is that your
personal asset profile no longer makes you look like a walking deep
pocket. Instead of owning all the assets in your name, you own them
through multiple legal entities which encapsulate them. Often, a
pre-lawsuit investigation causes your opponent to refrain from suing
you because you can no longer respond to a sizeable judgment.
One of the most valuable reasons for asset protection is to minimize
estate taxes payable at your death. Why go through all this trouble
earning and protecting our assets, when the government will just
take them when we die? In our simplified asset segregation plan,
asset protection vehicles significantly reduce the value of your
estate for estate tax purposes.
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