I recently attended a Maryland State Bar Course that covered the latest laws and decisions on asset protection in Maryland. Asset protection is a key factor in the decision to establish trusts for beneficiaries. The trust you establish for your children can be insulated from the claims of creditors, and divorcing spouses with proper drafting. Generally, the trust you establish for yourself is not asset protected, unless you create an irrevocable trust in a state with more favorable laws such as Delaware or Nevada.
Nevertheless, there are many legal ways to protect your assets from potential claims that may arise in our litigious society. In Maryland, a husband and wife holding property as tenants by the entirety insulate that property from the claims of their individual creditors. Property owned as tenants by the entirety retains its protection when transferred to a trust for the benefit of the married couple. Retirement accounts and pensions are also protected from creditor claims against the owner of the account. Limited Liability Companies and Corporations serve to limit the personal liability of members or shareholders.
In contrast, improper drafting of the bylaws and failure to comply with corporate laws can punch holes in the liability shield of a corporate form. Likewise, asset protection can be destroyed by improper titling especially by joint ownership intended for probate avoidance. Insurance proceeds payable to your estate can subject death benefits to claims. The effect of titling property and beneficiary designations is something you need to understand in conducting your personal affairs.
I do offer a consult to review the asset protection measures that you have in place and make suggestions to preserve the wealth you have accumulated. A focused review is especially appropriate for doctors, accountants, and business owners who may be subject to frivolous claims and law suits because of their position. The charge for a review session is $250 and entitles you to a copy of the book, “The Ladder of Success: An Asset Planning Primer” by Jeffrey R. Matsen.