My daughter and I own a house together. Could her husband take ownership in a divorce?
Asset protection planning can be an extremely vital component of an estate plan, particularly for a testator concerned about losing valuable land or property to creditors, judgments or liens. Oftentimes, it is the most responsible property owners who wind up facing unexpected judgments at the hands of irresponsible family members or business partners – making protection planning all the more valuable.
First, it helps to review some of the most common scenarios that can result in an unexpected imposition of a judgment or lien on property. Consider the scenario mentioned above where a parent and child co-own a piece of property. If the child comes to own the property during the time of his or her marriage, that property could become an issue in the event of a divorce. Moreover, the child could cognizably encumber the property without the knowledge of joint tenants, making it impossible to sell without first paying the balance of the debt.
Family dysfunction aside, judgments and liens can attach to personal property through unhealthy business relationships as well.Without proper asset planning, small business owners could quickly find their personal property and business assets encumbered by a judgment incurred by a wayward employee or through a civil lawsuit.
When beginning to plan, the earlier the better. Don’t wait until an issue arises before considering the importance of asset protection – or the plan could backfire. One of the most foundational issues to consider is the vital separation of personal and business assets. Personal assets should be placed in a revocable or irrevocable trust, while business assets should be shielded separately through the use of a corporate entity. If the two become commingled, it may be very easy for a creditor to “pierce the corporate veil” and hold the business owner personally liable for debts.
Business asset protection is not necessarily the same as protecting assets through an estate plan. Often, the two concepts point toward starkly different end goals, and only a competent attorney – with knowledge of both – is able to advise you properly about how to accomplish your goals.
To make an appointment with one of our highly knowledgeable business law attorneys, please contact Stone Law Offices, serving clients throughout Nevada, by calling 877-800-3424.