Asset Protection

What is the difference between an LLP (limited liability partnership) and an LLLP (limited liability limited partnership)? In Arizona, not much.

Arizona life insurance beneficiaries who are deemed to have “insurable interests” in the lives of another, other than those effecting the insurance or their legal representatives, are “entitled to [life insurance] proceeds against the creditors and representatives of the person effecting the insurance.

A qualified personal residence trust, or QPRT, can reduce the federal estate tax associated with transferring property to heirs, reduce the federal gift tax associated with such transfer, and, provide asset protection.

Real estate can be the source of substantial liabilities. Under certain circumstances, however, many of those liabilities can be eliminated by properly structuring ownership of real estate in a limited liability entity like a limited liability company (LLC).

An Arizona living trust is an arrangement in which a person, called a settlor, transfers his/her assets to a revocable trust for the benefit of others upon the settlor's death. Living trusts are commonly used as an alternative to wills in order to direct the distribution of a person's assets after his/her death and to avoid probate. In contrast, an Arizona testamentary trust is created by a decedent's will upon his/her death. Unlike living trusts, testamentary trusts are not created to avoid probate.

Brief, non-comprehensive illustrated overview of asset protection.

Asset protection is the process of arranging one’s assets to preserve maximum value for the owner and family, etc. in the event of creditor problems. It is not a single device that can be simply employed or elected. Instead, it involves the coordinated use of multiple legal disciplines, planning techniques and tools tailored to the assets and circumstances of the individual.

Over the past several decades estate tax considerations have motivated many married couples to include in their estate plans the creation and funding of one or two trusts upon the death of one of the spouses to hold that spouse’s estate.  The tax purpose of this structure is to avoid estate tax at the first death and to assure that the estate tax exemption of both spouses is preserved and available at the death of the second spouse.