Protecting your assets against creditors is an effective tool that may protect you in the event that you have to file bankruptcy at some point. There are various vehicles that offer this protection. One of the easiest and most overlooked way to protect assets is available to married couples. Many married couples do not realize that they can protect their joint assets by titling them as tenancy by the entireties or TBE. Assets such as bank accounts, real estate and investments can be titled as such. This protects the asset against one individual’s creditors. For example, if the husband owes money to a creditor alone, the TBE property cannot be attached by this creditor.
A simple way to protect money is to purchase a homestead property. Although this exemption is more limited than it once was in Florida, after four years, the total value of the property is totally exempt from creditors. In fact, a debtor may be eligible to avoid liens placed on homestead property through a bankruptcy so this tool offers much protection.
Finally, another vehicle that will offer protection is saving money in retirement accounts. Often employers offer a match in their 401(K) plans. This is a great tool to save money in a creditor protected environment. If you do not work for a company with such a benefit, you can put money into an Individual Retirement Account (IRA) or a Roth IRA in order to protect your money. Just remember, any unusual contributions may be subject to enhanced scrutiny from creditors or a bankruptcy trustee so you should contribute to these accounts in a habitual manner and build up your assets over time.
While no one wants to think of a bleak future, by seeking advice on asset protection from an attorney at Brodzki Jacobs & Brook, you will be prepared in the event that you ever need it.