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Asset Protection for Professionals and Business Owners in Florida


Lake Mary, Winter Park, Longwood, and Maitland, Florida Asset Protection Law Firm 

Exempt Assets

Florida law provides various ways to protect your assets from creditors.  The most basic planning involves owning assets that are exempt under Florida law, such as homestead, life insurance, annuities, and retirement accounts. Click here to download a listing of Florida's exempt assets; note that while some states allow you to choose either the state or federal exemptions, in Florida you must use the state exemptions and federal bankruptcy exemptions are not available.

Once you have identified the protected asset classes available to you under applicable law, it may be prudent to maximize your protection by converting non-exempt assets into exempt assets.

Florida also has what is known as “tenancy by the entirety”, a form of ownership of assets between a husband and wife.  Very similar to a joint tenancy with right of survivorship in that the asset will automatically become owned by the surviving spouse upon the first death without having to go through probate, tenancy by the entirety has the additional feature of protecting the entire asset from the creditors of only one spouse.  Only if a particular debt is owed by both spouses can the creditor attach (levy upon and sell) tenancy by the entirety property.

Business Owners

For business owners, it is important to establish the business in the form of a corporation or limited liability company.  Both types of entities will help protect your personal assets from the claims of business creditors. 

But what about protecting business assets from your personal creditors?  A corporation does not help here, because corporate stock that you own can be attached by your personal creditors.  A limited liability company (LLC) is the answer.  Under Florida law, a person’s ownership interest in a multi-member LLC (i.e. an LLC with more than one owner) cannot be attached.  The most the creditor can do is obtain a “charging order” requiring that any profits distributed be paid to it.  In the meantime the creditor becomes the owner for tax purposes and may suffer adverse tax consequences as a result, so quite often a creditor may forego the charging order remedy.

The membership interests of a single member LLC can be attached by creditors, but only under certain circumstances, so LLC membership interests still enjoy more asset protection than corporate stock.

Whatever type of asset protection planning you decide to do, it is important to do so before you develop problems paying your creditors.  If you wait too long to engage in asset protection planning you could run afoul of Florida’s fraudulent transfer laws.  Although homestead transactions are exempt from fraudulent transfer laws in Florida, you could still be denied a bankruptcy discharge for engaging in them.

For more information on asset protection planning in Florida, please contact us.

Asset Protection Resources:

Asset Protection - Reducing Risk, Promoting Peace of Mind

Protecing your Assets with the Limited Liability Company

Florida Estate Planning Attorney, Vincent J. Profaci, P.A., assists Clients with Estate Planning, Probate & Trust Administration, Corporate Law and Business Succession Planning, Real Estate Transactions, Elder Law, Long Term Care Planning, Florida Medicaid, Medicaid Crisis Planning, Wills & Trusts, Estate Administration, Asset Protection, Estate Tax Planning, Charitable Planning, Special Needs Planning, and Guardianship, in the cities of Winter Park, Longwood, Lake Mary, Maitland, and Heathrow, Florida, and the surrounding areas.  

 

Copyright Vincent J. Profaci. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement. Some artwork provided under license agreement.

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Law Office of Vincent J. Profaci, P.A. | 555 Winderley Place, Suite 300, Maitland, FL 32751
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