Being the most litigious society in the world, ownership of assets – whether a business, real estate, cash or other – all but puts a bull’s-eye on you. Protecting yourself and your family from future creditors should be a priority. While many people espouse the misconception that they only need asset protection planning if they are “rich,” this cannot be farther from the truth. At Dorot Law, P.A. we assist doctors, lawyers, business owners and investors of all sorts assure that the fruits of their labor are protected. We utilize and maximize the already-existing state law protections and supplement those with the use of domestic and foreign asset protection trusts, limited liability entities, life insurance planning and a myriad of other techniques to give you the peace of mind you need.
Asset protection planning is not a “cookie-cutter” endeavor and at Dorot Law, P.A. we analyze each client’s specific circumstances to assure that the the appropriate plan is implemented.
In the News and Relevant Publications
May 17, 2011. The Secret To Surviving Divorce With Your Finances Intact (Forbes). How you handle your divorce will significantly impact the rest of your life. So, it’s critical that you make thoughtful choices throughout the process. Even though it’s an emotional time, you have to think rationally –especially when it comes to your personal finances. In short, you have to Think Financially, Not Emotionally. But, for many women, that’s easier said than done. Too many women make terrible financial decisions when they are in the throes of a break-up, and then unfortunately, these poor decisions continue to have serious long-term negative effects –for them and their families. It doesn’t have to be that way, though. No matter where you are in the process, you have to keep your emotions in-check and treat the divorce as a business negotiation –which is exactly what it is. Someone once said that marriage is all about love, and divorce is all about money. They were right, and you must negotiate a divorce settlement agreement that financially protects you now, and well into the future…
April 19, 2011. Divorce Proof Your Business, Even If You’re Still Single Or Happily Married! (Forbes). It may seem strange to think about divorce while you’re still single or happily married, but, as a woman business owner, divorce-proofing your business should be an important part of your financial plan, even if you never need to use it. Consider this as a type of insurance policy, similar to your homeowner’s insurance – you hope you never have to use it but you feel secure having it. And, if that storm ever blows through and levels your house, you’ll be really glad that you have it! After all, the divorce statistics do not bode well. Approximately half of all first marriages and about 70% of second and third marriages end in divorce. So even if you are happily married—or not yet married – you should never assume that this can’t or won’t happen to you. If you’re a successful woman business owner, you’ve worked hard to build your business. You’ve sacrificed so much and spent untold hours making it what it is today…
March 24, 2011. Credit Default Swaps Could Impact Homeowners Says Florida Homestead Law Group (Marketwire). Credit default swaps (CDS) are similar to insurance contracts in that they promise to cover losses on certain securities in the event of default. While CDSs are supposed to give homeowners a feeling of protection in return for their premiums, they often do not. This can ultimately affect a homeowner’s ability to obtain a Florida loan modification. Insurance companies and banks are regulated and credit swap markets are not. Due to this difference in markets, CDSs can be traded through several investors without the guarantee that anyone is monitoring the swaps to ensure the buyer can cover the risk of loss if the security defaults. Commercial banks are amongst the key players in the CDS market. These banks also serve in the capacity as mortgage loan servicers of residential loans…
March 21, 2011. Spouses, Beware: Your Partner’s Creditors Might Sue You, Too (CBS Money Watch). When a wealthy man (it’s usually a man) has creditors on his trail, he’ll probably try to protect some assets by transferring them to his wife. If it works, his wife will be richer than she was before. On the downside, the law might come after her, too — wanting the money back. That’s what’s happening to the wives of two top executives of the failed Washington Mutual Bank, which was seized by the government in September, 2008. The Federal Deposit Insurance Corporation sued their husbands — former CEO Kerry Killinger and former COO Stephen Rotella — in federal court in Seattle last week, for negligence and breach of fiduciary duty in their management of the bank. WaMu’s Home Loan President David Schneider was also charged…
March 18, 2011. Is Your Wealth Safe Under New Estate Tax Laws? (Morningstar). The waning days of 2010 brought some significant changes to the tax code, including the estate tax laws. To get some perspective on what these changes are, as well as the implications for individuals’ estate plans, I recently interviewed attorney and estate-planning expert Deborah L. Jacobs. Jacobs is author of the book Estate Planning Smarts, a compendium of practical advice about estate-planning that covers everything from wills and trusts to charitable giving and reducing the drag of taxes on your investment assets. The following is a transcript of our conversation. Christine Benz: Given that flurry of activity that went on toward the end of 2010, where are we now in terms of the estate tax rules, and what do folks need to know about them…
March 15, 2011. Making Over A Physician’s Asset Protection Plan: A Case Study (Physicians Practice.com). Doctors and practice managers are continually bombarded with a combination of information and sales materials on various legal and financial strategies, often in a vacuum that fails to explain how the pieces work as one holistic system. Below is an actual physician’s “before and after” incorporating many of the elements covered in my previous articles on specific elements of defensive financial and legal planning over the last few weeks. Minor identifying details have been changed to protect the doctor’s privacy. Fact Pattern…
March 2, 2011. Reasons Why You Should Do Asset Protection Planning (Southern Business Journal). When you have spent a lifetime accumulating what you have obtained, you do not want all (or even a part) to be lost to creditors or predators, either now or at any time in the future. If you are a physician, dentist, lawyer, financial advisor or other professional in a high-risk career, you understand, or should understand, the need to do asset protection planning, as well as to have adequate liability insurance. Every time you treat a patient or counsel a client or otherwise engage in providing your professional services, there is a certain risk, no matter your professional skill, that an accident or mistake will be made. You do not want to risk all that you have worked so hard to achieve going down the drain defending your reputation or preventing impoverishment of yourself and your family should a law suit result in a settlement…
February 26, 2011. When Bad Things Happen to Good Physicians (MDNews.com). It happens — often when you least expect it — things change abruptly and cause you to depend more heavily on your financial resources and previous financial planning because of a sudden change of circumstances. In this article we will look at two undesirable, yet fairly common life events, and discuss strategies available for you to deal with them. These include estate/asset protection and divorce…
February 2011. How to protect your assets from risk (Small Business). You’ve spent years building your business and accumulating assets, but what are you doing to protect them? An outside adviser can help you take the proper steps to avoid the many risks to which you’re exposed, says David Musser, a partner at Nichols Cauley & Associates LLC…
January 25, 2011. How To Divorce-Proof Your Business: The Prenup (Huffington Post). So what is a prenup? A prenuptial agreement is a contract signed by both parties before their wedding that details what their property rights and expectations (including alimony) would be upon divorce. A well-drafted prenup can “override” both Community Property and Equitable Distribution State laws and the courts will usually respect such agreements (which is one reason why they are so powerful)…
January 18, 2011. How To Divorce-Proof Your Business: The Basics (Huffington Post). When people get married they are all hoping for the “happily ever after,” but the sad fact is that 52% of all first marriages and 70% of second and third marriages end in divorce. While divorces are always very difficult for everyone involved, it can become that much more difficult when one or both spouses own a business. Your business is probably the most valuable financial asset you own. You’ve spent countless hours (nights and weekends) and resources nurturing and growing it. But did you know that you might be unwittingly doing things that could put your business at risk in the event of a future divorce?…
January 11, 2011. Asset protection proposed in pre-nup reform (Financial Times). Rich couples might be able to ensure that some of their wealth is protected from divorce pay-outs under proposals contained in a consultation paper examining whether pre-nuptial agreements should be made legally binding. The Law Commission, an independent body which assesses whether the law needs changing, is seeking public views on options for reform before recommending to government if legislation covering pre-nups is necessary…
January, 2011. Chinks in the Armor: Current Trends in Limited Liability Company Structure After Olmstead (Florida Bar Journal). From corporations to limited partnerships and limited liability companies, developing trends in the law shape the dynamics of an entity’s limited liability. Certain corporate forms provide more protection from outside creditors than others. This article will examine a few of these entities and see where chinks in the armor exist, allowing outside creditors to reach seemingly protected assets…
December, 2010. After Olmstead: Will a Multiple-member LLC Continue to Have Charging Order Protection? (Florida Bar Journal). On June 24, 2010, the Florida Supreme Court issued its long-awaited opinion in the case of Shaun Olmstead, et al., v. The Federal Trade Commission, Supreme Court of Florida, Case No. SC08 1009, 2010 WL 2518106 (Fla.) and raised the question as to whether multiple-member Florida limited liability companies (LLCs) will continue to have charging order protection…
November 1, 2010. Offshore Asset Protection Trusts: Have the rumors of their death been greatly exaggerated? (Trusts & Estates). The death of the offshore asset protection trust has, by some, been greatly exaggerated. In recent years, attacks on a few such trusts under extreme circumstances have resulted in the incarceration of the debtor-settlor (settlor). But these results have been solely because of the settlor’s abuse of the trust arrangement rather than the arrangement itself. With proper timing and expert advice, offshore asset protection trusts can protect the settlor’s assets without the risk of jail…
Summer, 2010. Olmstead: The Biggest Chink In The Armor (Florida Bar Tax Bulletin, Page 7). Since its introduction into the Florida Limited Liability Company Act (the “LLC Act”) in 1993, the “charging order” provision has served as a key asset protection feature of Limited Liability Companies (“LLCs”). If a member of an LLC is unable to satisfy his personal debts owed to a judgment creditor (outside liability), that judgment creditor’s remedy against the member is usually limited to receiving a “charging order” against the economic income of that member’s share of an LLC’s distributions.1 However, after the Florida Supreme Court’s decision in Olmstead, et al v. Fed. Trade Comm’n, 35 Fla. L. Weekly S357 (Fla. 2010), this may no longer be true…
May 01, 2010. Asset Protection for the Middle Class (Trusts and Estates). There’s a new type of asset protection technique that’s evolved from a well-established and highly effective elder law planning tool: the irrevocable income only Medicaid trust (IIOMT). We find the IIOMT to be an extremely effective tool in Medicaid planning. But the IIOMT is now being marketed outside the Medicaid arena as an asset protection tool for middle income families against all creditors…
February, 2010. Tax and Asset Protection Benefits Afforded Florida Domiciliaries (Florida Bar Journal). The most common reason an individual chooses to live in Florida is its temperate climate. But Florida’s benefits extend far beyond a warmer climate because of its favorable tax laws and asset protection opportunities. Since Florida does not impose an individual income, estate, gift, or generation-skipping transfer tax, and has very favorable asset protection laws, it is far superior than other states with respect to these matters of great concern to most people…
January 1, 2010. Don’t Be Foolish. (Trusts & Estates). In 2009, asset protection specialists watched a major Internal Revenue Service drive to flush out secret foreign bank accounts while a financial crisis brought to light mammoth Ponzi schemes and took down publicly traded companies. But we saw few relevant new laws and rulings in the area…
July/August, 2009. Creditor’s Rights Under Private Annuities and Grantor-retained Annuity Trusts in Florida (Florida Bar Journal). The second part of a recent two-part Florida Bar Journal article titled “Unraveling the Mysteries of the Florida Exemptions for Life Insurance and Annuity Contracts, Part Two” discusses the creditor protection elements of annuity contracts. The article discusses inter alia the exemption granted by F.S. §222.14. Under this statute, the proceeds of an annuity contract issued to a Florida resident are statutorily exempt from the beneficiary’s creditors. The article reaches the conclusion that a private annuity arrangement should not qualify for protection under the Florida statute as an exempt asset because the legislature did not intend to protect private contracts.3 The authors respectfully disagree with this perspective in light of the analysis and authority cited below, which includes general rules of statutory construction and the bankruptcy decision in In re Mart, 88 B.R. 436 (S.D. Fla. 1988), which specifically held that a private annuity contract entered into between a debtor and a trust established by the debtor was a protected annuity under F.S. §222.14.
