Florida Asset Protection: Trusts, Laws & Attorneys
This article will discuss Florida asset protection law. After reading it, you will have a good idea about how asset protection works in Florida and discover which strategies are right for your needs.
Asset protection laws are designed to protect your assets from creditors. Creditors may be individuals, businesses, or government entities who have a legal claim against you and can take away your property if they succeed in their pursuit of you. Asset protection is completely legal under Florida law.
When you protect your assets, you can safeguard all, or nearly all, of your assets. This includes real estate, liquid assets including cash and stock, businesses and other investments and property. Doing so makes it more challenging for a judgment creditor, whether now or in the future, to take those assets from you.
Florida Asset Protection Strategies
Here is one of the most powerful of the Florida asset protection strategies. It is the process of transferring assets into one or more offshore trusts to keep them safe from creditors. Admittedly, this does not just pertain to Florida. Someone in any state can use this powerful strategy. We mention it up front because the trusts that offer the strongest asset protection are those that remove the assets from the reach of the US court system. Results-oriented judges can concoct justifications for seizing assets within their reach. So, utilizing an asset protection trust with our law firm as trustee of a Nevis Trust; Nevis is a Caribbean Island (southeast of Florida) or the Cook Islands Trust (south of Hawaii) you can have one of the two of the strongest means of protection.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
Where Do Florida Asset Protection Laws Come From
Many people consider Florida as friendly to debtors. This is because of the various asset exemptions that Florida law offers. Such laws protect assets from seizure in civil judgments. Here are the main three sources of Florida’s debtor-friendly statutes.
- The Constitution Florida
- Florida statutes, which are laws that were enacted by state politicians.
- Common law, in Florida and elsewhere.
The Florida Constitution is really the basis of many of the other laws in Florida. It specifies certain protections such as Florida’s robust homestead protection, protecting most primary residences from seizure.
In addition, there are many laws that Florida politicians have established that protect assets from creditors. This includes protection for IRAs, pension funds and property owned under tenancy by the entries, which is ownership in this fashion between spouses.
Florida Common Law
Lastly, there are common law protections. Common law is based on legal precedent or what is traditionally accepted. Such law is supported by the the Florida court of appeals and how they have ruled on particular cases. So, you have statutory (written) law. Then you have the demonstration of how judges interpret statutory laws in real-world cases. The way courts interpret the laws, in turn, really define and interpret their use. These rulings become precedent for how courts should interpret similar disputes that are brought before them. Most judges respect legal precedent and use prior cases to make their rulings.
Florida Asset Protection Laws
Florida is one of the top states for asset protection because of its robust creditor protection statutes. Laws in Florida grant unlimited homestead protection for a primary residence. It protects tenants by entireties property, between husband and wife. Florida protects head of household wages. It offers protection for IRAs and 401(k)s, life insurance, annuities, disability insurance and others.
In addition, Florida has its own set of bankruptcy laws. It does not follow the federal bankruptcy exemptions. Therefore, residents of Florida have a wider base of bankruptcy exemptions.
Why Do I Need Asset Protection?
You’re rich, so you must be a target for lawsuits, right? Sad but true. If you have been blessed with an above average asset base, you have an above average lawsuit risk.
Lawsuits can happen to anyone at any time, and they can be incredibly costly. Even if you’re not found liable, the cost of defending yourself in court can be astronomical.
Solution: Asset protection. Asset protection is a legal service that will help protect your assets from frivolous lawsuits. Our team of experienced attorneys in Florida and elsewhere, will work with you to create a custom asset protection plan that fits your unique needs.
What Can a Florida Asset Protection Attorney Do for You?
You may have heard about the benefits of asset protection, but you may not don’t really know what it is or how to go about getting it.
Asset Protection is something that every business owner should consider. If you are not doing so, your competitors probably are. But with all of the different types of asset protection available (domestic, offshore trusts), which one do you need? What does a Florida asset protection law firm do for me?
Well, the best way to find out what an attorney can do for you is by calling us and finding out. In fact, if you are serious and have sufficient assets, our attorneys can offer a free initial consultation. Schedule your free initial consultation by filling out our consultation form on this website or by calling the number above.
What Can I Expect From My Asset Protection Attorney?
There are three main steps when going over an asset protection plan with our in-house attorneys or consultants.
- To start, the attorney will go over your legal challenges and liabilities. So, he or she will review the problems you face.
- Next, the attorney / consultant will review your assets and determine which, if any, legal tools are appropriate for each assets. In other words, they will determine which assets do or do not need protection.
- Lastly, for assets that need protection, we will go over your legal options to determine the proper legal tool protection for each asset.
Asset Protection in Florida
You have a lot of money tied up in your business and investments and are concerned about the risk of lawsuits.
In fact, look at the billboards as you drive through the major cities in Florida. Florida is one of the most litigious states in America and it’s not getting better anytime soon. In fact, Florida has been ranked as having more lawyers per capita than any other state by Forbes Magazine. This means that there is a greater chance that someone will sue you or try to take your assets if they know that you have them.
A good asset protection attorney can help protect your personal wealth from greedy creditors and aggressive plaintiffs who might be after your hard earned money. Since we’re based here the Fort Lauderdale area, we are in the midst of the most populous part of the state. We understand how important protecting what matters most to you is for our clients’ peace of mind and financial security. That’s why it’s so important to work with an experienced lawyer who understands this unique area of law inside and out—and knows how best to protect what matters most for each individual client.
Homestead Protection in Florida
In the majority of cases, someone cannot take your house in Florida. It is one of the best known creditor exemptions in Florida, the homestead exemption. Unlike, California, New York and most other states, your primary residence is generally protected in Florida from creditors.
There are acreage limits. But there is no value limit on the Florida homestead exemption.
If in a municipality (a city) you can have homestead protection on up to 1/2 of an acre. If outside of the city limits, Florida statutes protect up to 160 contiguous acres. Moreover, you must actually live in the house as your primary dwelling.
Fraud or use of criminal proceeds are some exceptions to the homestead exemption providing asset protection in Florida.
What Are Super Creditors?
Florida asset protection laws do not protect against what we call “super creditors” as dictated by federal law. Examples of super creditors include the IRS, the SEC, the Department of Justice, and the Federal Trade Commission.
Even if the assets are exempt under state law, super creditor can still seize them. As an example, under state law, assets are protected from creditors of one spouse when owned as tenants by the entireties. However, the IRS can take half of such assets a couple holds in this manner.
Moreover, the federal government can even seize assets before they get a judgment in Florida. Thus, such aggressive actions often ties a debtor’s hands and forces the debtor into a settlement that is more beneficial for the US government.
We don’t knowingly protect assets against the federal government. So, preemptive action is necessary. Suppose you have no idea a government agency is about to seize your assets. You will have needed to have placed your legally-acquired assets in a proper account within an offshore trust prior to such seizure.
Most asset protection strategies are tax-neutral. In addition, protecting assets does not protect you from paying your tax bill.
So, yes, you can move assets offshore to protect them within the proper structures. But offshore asset protection and income tax planning are two different animals.
Moving money offshore that you have already paid taxes on is legal. Transferring assets offshore to avoid paying taxes is tax evasion. So, we do not, and you should not, participate.
Divorce Asset Protection
Many people seek our services to protect assets in divorce. This is best when you do so before you or your spouse file for divorce.
Judges in family court have greater power than most justices in civil courts. For example, Florida asset protection statutes give tremendous protect for retirement accounts and primary residences. However, Florida law does not protect such assets from divorce. So, we need to employ other means.
Plus, a judge can hold you in contempt for failure to pay spousal support or child support. So, we need to employ alternative measures to protect assets in the case of divorce.
How Long Does a Judgment Last in Florida?
A Florida judgment lasts for 20 years. This clock starts ticking when the courts issue the judgement. It doesn’t matter when the debt came due or when your opponent filed the case.
Florida Asset Protection Trust
Florida does not offer statutes that offer domestic asset protection trusts. That is why those seeking a Florida asset protection trust will usually opt for the offshore trust discussed above.
Don’t run out and try to establish an asset protection trust in another US state. Why? They don’t work. We have seen Florida judges penetrate them over and over again. Courts rule that since the person is in Florida, that Florida laws apply. Then the judge orders the US-based trustee to turn over the assets.
So, if you want an asset protection trust, call us. We can discuss the international options that have worked for many of our tens of thousands of clients. Call or fill out a free consultation form above.