Combination of corporations
The proper and timely installation and combination of corporations, limited partnerships and trusts could help insulate your properties in case you are named a defendant in a lawsuit that carries potentially catastrophic results.
Experts suggest that to avoid the charge of fraudulently transferring assets, you must protect your properties long before a claim surfaces. If you must make transfers, make them small in scale.
It is important to avoid insider deals with close friends, relatives and business associates. You should establish the transfer for other purposes (not exclusively for asset protection), such as for estate planning. It is essential to carefully document everything involved in the deal. If you must sell your home, do not occupy it as a tenant.
Do your homework and verify the true fair market value of the asset you are about to transfer. The choice of transferees should be made with great care to avoid any suspicion. It is wise not to give any undue media attention to your deals.
Goldstein recommends an expensive and risky strategy of coming out with “multiple” asset protection devices. “Why simply deed your home to one party when you can also mortgage it to a friend owed $100,000? Your creditor must then challenge both the transfer and the mortgage.” More reachable, but less extravagant, properties should be exposed to satisfy the collection efforts of claimants.
