Solutions to protect your assets
Who Needs Asset Protection?
The often asked question is who needs asset protection?
The practitioner just completing their medical training may ask, "My net worth is negative with my education loans and my net income is less than one hundred dollars after taxes and expenses! Why should I go to the effort to protect my assets?" However that will not stop aggressive attorneys from going after future income. But you can create investment strategies which will allow you to safely built your wealth.
Or "My net worth is in excess of five million dollars in good solid investments. I carry five million dollars of malpractice insurance, and my annual net income after taxes and expenses exceeds a half of million dollars.". These doctors have a target on their back, some attorney think they already know how they will get some or all of these assets unless you aggressively protect most of them.
Who knows what about your finances?
To get a quick sample of who knows about what we recommend you obtain the free annual credit report from the three major credit bureaus. This information is nearly public and certainly not private. These are truly free credit reports not like some of the scams on the internet or TV. You can request your free report online, by phone or by mail. Visit www.AnnualCreditReport.com, call 1-877-322-8228, or fill out the Annual Credit Report Request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. No matter how you request your report, you have the option to request all three reports at once or to order one report at a time. By requesting the reports separately, you can monitor your credit more frequently throughout the year.
Gold - The best protector of wealth
History tells us that the printing money in excess of a nation's GNP causes inflation and bear markets. The strategy: If you think the overall market is going to drop, then to pull some of your dollars out and move them to where they are most likely to see growth, namely - gold. Gold may decline in value in relationship to some target currency (e.g. the dollar), but usually only when the target currency increases in value. Gold's value usually has an inverse relationship with any target currency so it can normally buy the same basket of goods (produces or services) as the value of the currency changes up or down. Gold has always retained substantial value and can be converted to all major currencies. Gold is a protector of wealth, and realistically not a creator of wealth except with exceptionally good trades on the commodities market.
Investors have three easy ways to play this eternal protector of wealth (for at least six thousand years):
Option 1: Bullion. This is physical ownership of gold through an exchange-traded fund (ETF) such as SPDR Gold Shares, which trades under the ticker GLD.
Option 2: The Market Vectors Gold Miners ETF (NYSE: GDX). This ETF tracks the performance of the AMEX Gold Miners Index.
Option 3: Purchase Gold Coins - This is the "true physical ownership" of gold - the preferred coinage is the Canadian Maple Leaf which can be purchased from any number of sources, however we recommend purchasing from American Precious Metals Exchange for their fair prices and excellent service. We recommend using cash to buy Money Orders to make your purchases of gold nearly untraceable. In most major Florida cities free money orders are available from Amscot money service centers, look for the blue and yellow signs. Remember when the amount one or more purchases of money orders, cashiers or certified checks approaches $10,000 within a short time period usually a week the financial institution is obligated by federal law to report these transactions to the U.S. Treasury Department to determine if money laundering is taking place. It is currently perfectly legal to convert your currency into gold. We further recommend you physically store most of your gold in safety deposit boxes in banks legally and physically located in Canada, in case the U.S. Government decides totally unconstitutionally to confiscate gold as it did in 1933. Using another off shore trust such as a Canadian bank and/or trust company located in the Bahamas to control these safety deposit boxes makes the discovery and attachment of your physical gold nearly impossible.
Florida's Extra Ordinary Homestead Law
Florida's creditor protection homestead provision is one of the broadest in the United States The value of the property that can be protected is unlimited, so long as the property occupies no more than ½ acre within a municipality, or 160 acres outside of a municipality. This is written into the Florida Constitution, Article X, section 4, and cannot be changed without a constitutional amendment.
One event that can drastically affect the value of a homestead is municipal incorporation. If a 160 acre non-municipal homestead is on land that is later incorporated into a municipality, the homestead will be grandfathered in and remain protected for the owner and his heirs. However, for any future purchasers of all or part of the property, the protected land will drop to the ½ acre allowed within a municipality.
The Florida homestead exemption offers virtually absolute protection from forced sale to meet the demands of creditors, except under three special circumstances.
Three types of creditors can still force the sale of a homestead to collect debts owed to them. These are:
- The State of Florida and its counties or municipalities,
to collect past due property taxes;
- Parties to whom the property was specifically pledged as
credit for a mortgage;
- Mechanics who are owed money for work performed in repairing or improving the property.
Because the homestead exemption is state law, it can also be overridden by the federal law due to the Supremacy Clause of the United States Constitution. Federal income tax liens are superior to the homestead protection provided by the Florida Constitution.
Another unique feature of Florida's homestead exemption is that it attaches to proceeds from the sale of a home, if the homeowner intends to use those proceeds to establish a new Florida homestead within a reasonable time. Therefore, if the owner of a $1,000,000 home sells that home and puts the money in a bank account, that money is still protected by the homestead exemption, so long as the homeowner has a bona fide intent to use it to purchase another home in Florida entitled to the exemption within a reasonable period of time. This protection is lost if the funds are commingled with other funds not designated for such a purchase. Also, the protection only extends to the amount the owner intends to invest in a new homestead - if the owner of a $1,000,000 home sells that home, and makes clear his intent to purchase a $750,000 home, the remaining $250,000 will lose its protection.
Homestead protection only applies to an individual’s primary home. Therefore does not apply to businesses, rental property, second homes, homeowner's claiming permanent residency or tax credits in other states, or homes with owners that do not claim Florida as their primary residence.
The Homestead law also protects a spouse in several ways. First, it restrains the homeowner from conveying the property without the approval of their spouse, even if the property is entirely in the name of one spouse, or was purchased entirely from funds of one spouse. The provision also prohibits a spouse from devising the property by will, if the homeowner is survived by a spouse or a minor child. A spouse may waive these rights in writing with respect to the will, but a minor child is not competent to do so. Finally, the homestead exemption for property taxes automatically attaches to the surviving spouse, so the property will never be exposed to the creditors of either spouse because of the death of the other.
Automobile as an asset
A Florida Vehicle Trust protects your assets by holding the title in a specifically designed trust. In Florida the owner and the driver of a Car, Motorcycle, or other vehicle is liable for any damage done by the driver of the vehicle.
Florida residents may protect up to $1,000 of equity in an automobile. The fact that a debtor needs his automobile to go to work does not protect the vehicle from creditors to the extent that the debtor's equity (value less loan amount) exceeds $1,000. With proper planning this limit can be virtually eliminated. The Florida Vehicle Trust also protects you against law suits, if a minor child or any other driver of your vehicle should have an accident.
Liquidity
Under Florida law there are several forms of assets that can provide guarantee and competitive rates of return with tax deferred accumulation while being totally protected from suits in the Florida courts. In fact these assets need not even be listed as assets during the discovery process of a law suit in Florida courts. When needed these assets can easily be converted into cash for either personal or business use. With careful documented procedures the proceeds from these investments can be used without fear of being attached by court judgments.
Converting Current and Future Practice Assets
Under Florida law you may be able to convert your practice assets (medical equipment, office equipment, etc.) into legal forms of assets which will be totally protected from suits in the Florida counts, in fact these assets need not even be listed as assets during the discovery process of a law suit in Florida courts. You can continue to use these practice assets even if there is a Florida court ordered judgment against you and/or your practice.
Accounts Receivables
Most medical practices have large sums of money (assets) in the form of accounts receivables from patients, insurance companies, and various government sources which can normally be attached by a count judgment. Most of these funds can be protected from judgments, while accelerating cash flow.