We know that you have worked hard to get to where you are financially, but there are a lot of people out there who want to take away what you have. The following is a non-exhaustive list of some common asset protection and liability minimization maneuvers. These tactics should be made "by prescription" only. In other words, if not carefully planned and executed by an asset protection expert, you could end up doing more harm than good. For example, there are numerous income tax, sales tax, documentary stamp tax, insurance, estate tax, estate planning, regulatory, business, personal and practical considerations that must be carefully evaluated before implementing any of these maneuvers. Additionally, one must analyze the facts and circumstances existing at the time to gauge whether any of these moves might be considered a fraudulent conveyance. That being said, here is a list of items to consider:

1. Acquire a home as your Principal Residence. In Florida, the Florida Homestead exemption for asset protection is a shield against virtually all non lien creditors (i.e., it does not apply to perfected security interests on it such as the mortgage). In Florida there is no limit to the value of the property that is covered by a Florida homestead exemption. (See Florida Statutes, FS 222.01 and Article X Section 4 of the Florida Constitution). However, there may be limits placed on the Homestead Exemption by Federal Bankruptcy Law:

The Bankruptcy Abuse and Consumer Protection Act ("BACPA") limit on homestead exemptions: The exemption for a homestead is limited to $125,000 (or $250,000 for both husband and wife) if the property was acquired within the previous 1215 days (3.3 years). The cap is not applicable to any interest transferred from a debtor's previous principal residence (which was acquired prior to the beginning of such 1215-day period). But even the $125,000 exemption is not protected if the debtor has not been a Florida resident for two years. This change was designed to prevent people from moving from out of state to take advantage of Florida's homestead protection. Also, the $125,000 exemption cap was increased on April 1, 2007 to $136,875.00 [see 11 USC §522 p(1)].

Note: Florida's homestead exemption is limited to 1/2 acre within a municipality and 160 acres outside of a municipality.

2. Convert Corporations to Limited Liability Companies or Limited Partnerships to limit the owners’ judgment creditor to a charging order remedy. If carefully planned and implemented, this can be a tax-neutral transaction in which the only change is the suffix in the entity name (e.g. “Inc.” to “LLC”).

3. Avoid signing any personal guarantees or at least carefully draft limitations on their scope and duration. Obviously, the “corporate veil” won’t protect you if you sign an unlimited personal guarantee. Minimize or eliminate personal involvement in business operations to avoid personal or vicarious tort liability.

4. Retitle most property (e.g. non-homestead real estate) in the name of a Limited Liability Company with a properly drafted operating agreement. The LLC statute provides a specific set of comprehensive rules governing the relationship among the owners and the Company. However, a carefully crafted Operating Agreement is recommended to address such matters as transferability of interests without the unanimous consent of the remaining members. Be especially careful not to have a form provision that an owner’s judgment creditor might use to creatively circumvent the default asset protection provided by statute.

5. Convert non-exempt assets such as cash, stocks and bonds into exempt assets such as retirement accounts, annuities and life insurance. However, there are many things to consider before doing so, including analyzing the timing of such transfers, as transfers are subject to Florida’s fraudulent conveyance statutes and fraudulent transfers are reversible. After conducting a financial analysis of the relative interest rates, pay off any mortgages on homestead property by leveraging investment property.

6. Get married, stay married (and don’t let your spouse die.) Tenancies by the Entirety (properly titled with joint ownership of title by husband and wife, in which both have the right to the entire property, and, upon the death of one, the other has title, which is known as the right of survivorship) are an excellent asset protection tool, but they last only as long as the marriage and there are exceptions. Enforceable pre and post-nuptial agreements are also an excellent tool for both asset protection and estate planning, so long as you are aware of their limitations and the potential tax consequences when the agreement is invoked.

7. Establish and maintain adequate internal documentation for all business entities, including minutes of annual meetings, resolutions, consents, bylaws and operating/shareholder/ partnership agreements as applicable.

8. Separate business assets and operations into distinct legal entities, and separate investment properties into individual legal entities (i.e. don’t keep all your eggs in one basket). This structuring must be carefully designed, implemented and maintained in order to ensure a court will respect the separate legal existence of the entities, as well as to avoid any tax impact.

9. Avoid or incorporate any form of joint venture, general partnership or joint tenancy. One of the most common asset protection mistakes is to retitle property in a joint tenancy with another family member you expect will inherit the property in lieu of proper estate planning.

10. Consider using trusts with an understanding of what can and cannot be accomplished. A popular misconception is that a Revocable / Living Trust provides asset protection and/or tax benefits. The purpose of that estate planning technique is to keep those assets held by the trust out of probate and guardianship estates.

11. Purchase enough of the right insurance with adequate coverage limits, including general business, business interruption, property & casualty, umbrella and, if applicable, malpractice insurance. However, take note of the fact that: 1) what your insurance agent told you is covered may not be what your policy says; 2) your coverage has deductibles and limits that may not be practical considering the amount of the premiums; and 3) if your policy accidentally expires, you could have a gap in coverage.

The information provided above is intended to give you a basic understanding of select asset protection and liability minimization maneuvers, but this does not constitute legal advice and it cannot substitute for a thorough review and determination of individual issues, situations and requirements with your attorney.