Can I transfer assets after problems arise?
It’s not a good idea, because it raises fraudulent transfer concerns and could be a Uniform Fraudulent Transfer Act (UFTA) violation. To avoid UFTA violation, you should never make transfers that render you insolvent. Also, you should look for ways to disclose a transfer. Finally, you should never hinder an existing creditor with a judgment or an existing claim. If you follow these basic rules, a “rainy day” planning is ok.
Can I incorporate asset protection in estate planning?
Yes. Normally this will involve a development of revocable trust. Fundamental asset protection strategies involving estate planning are
- Develop an estate plan including a revocable trust
- Make sure the revocable trust plan is properly funded
- Consider including a power of attorney with broad gifting powers that could deal with long-term care planning
- Establish in the revocable living trust lifetime irrevocable wholly discretionary or spendthrift sub-trusts for the beneficiaries. Remember, not only both spendthrift trusts and discretionary trusts protect donee (beneficiary) from his/her creditors, but also trust assets are out of settlor’s (donor’s) estate.
- Between a husband and wife, incorporate into the trust mechanisms maximizing Ohio Life Estate Marital Deduction and utilizing Ohio Qualified Terminable Interest Property (QTIP)
- Consider incorporate into the trust a beneficiary controlled trust
- Consider incorporate into the trust a provision which opts out the rule of perpetuities
- Using asset protection trust (APT), both domestic and foreign, to be effective against settlor’s own creditors as well as beneficiaries’ creditors.
There are many more strategies in estate planning to achieve asset protection. For more information and details, consult a qualified estate planning attorney.
Ohio exemptions summary
Ohio has good exemptions for
- Cash value (CV) of life insurance
- Traditional IRAs, Roths, Rollover IRAs
Ohio has weak exemptions for all else
- Homestead ($20,200)
- Wages (about $10,200/yr after tax)
- Personal property ($10,775)
- No tenancy by the entirety estates
Lei Jiang Law Firm provides legal service in estate planning and asset protection planning. For more detailed information and tailored analysis, please contact us.