Comprehensive Estate Planning in Palo Alto: Safeguard Your Legacy

Why Asset Protection Is Necessary

You may be wondering whether it is necessary to take extra steps to safeguard your assets. You may have already implemented a revocable living trust and are comfortable in knowing that your estate will most likely avoid the worst of probate. 

We urge our clients to expect the unexpected, and while you should hope for the best, you should prepare for the worst. Ideally, you will want to avoid any scenario where another party can forcibly seize control of your assets – or assets inherited by your loved ones – through some legal mechanism. These situations are not always easily predictable, and predatory players may even target your beneficiary’s inheritances. Wealth preservation strategies incorporate additional layers of protection and make your assets and inherited assets more difficult to access.

Proactive asset protection can shield against:

• Creditor Claims. When you pass away, creditors have the right to make claims against your estate. If your estate plan does not include a trust, your personal representative will have to use estate assets to pay all valid debts and obligations before any property can be distributed. When you pass away with a living trust in place, your successor trustee can distribute assets in accordance with your instructions. However, creditors can potentially come after living trust assets if valid debts are not settled. Additionally, creditors can look to seize living trust assets if one of your beneficiaries defaults on a debt. Certain asset protection strategies can keep creditors from accessing your assets while you are alive and after you are gone, even if they win a lawsuit and receive a judgment.
• Litigation. Lawsuits can come from a variety of sources. You or your beneficiary could potentially be sued by a disgruntled former business partner or someone filing a personal injury claim as a result of a car accident, for example. Some parties may even choose to pursue a frivolous lawsuit if they perceive you or your beneficiary to be especially wealthy. With strong asset protection strategies in place, even a successful litigant will have a hard time seizing your or your beneficiary’s property. 
• Divorce. In a California divorce, assets will be considered “separate property” or “community property.” If an asset was acquired during a marriage, it is automatically considered community property and is subject to equal division. Inherited assets are considered “separate property,” however, and asset protection tools can potentially insulate large portions of your beneficiary’s estate. Many parents will employ asset protection strategies to protect their children from losses in future divorces.
• Punishing Taxes. Federal estate taxes, gift taxes, and generation-skipping transfer (GST) taxes can all negatively impact your holdings and ability to provide for future generations. Many asset protection tools can help you reduce or eliminate excessive tax exposure and potentially save you and your family hundreds of millions of dollars in the long term.

Comprehensive Estate Planning in Palo Alto: Safeguard Your Legacy

You may understandably wish to protect your estate as much as possible while you are alive. The sooner you start planning for asset protection, the better. Attempting to implement asset protection tools after you realize there is an immediate, real risk of losing property to creditors or litigation can backfire. 

If you are concerned about one day being targeted by predatory creditors or litigators, you may want to consider implementing a Private Retirement Plan (PRP). This will typically consist of a Private Retirement Trust, strategic retitling of assets, and professional actuarial analysis. By legally designating PRP assets as “retirement assets,” you grant them special protections that can in many circumstances shield them from creditors and litigants. Other types of irrevocable trusts can also often achieve similar levels of asset protection. 

Our Palo Alto asset protection attorneys can also assist you with estate and gift tax planning. We can develop a comprehensive, multi-pronged approach to save your family millions of dollars. Avoiding unnecessary taxes typically involves incorporating some strategic combination of irrevocable trusts, Family Limited Partnerships, and/or lifetime gifting into your estate plan. We can assess your potential exposure and recommend how best to prevent unfavorable outcomes.

Securing Your Family's Future with Trusts in Palo Alto

Inheritances can quickly be lost to divorce, creditors, and litigation. When you have worked so hard to build your legacy, you deserve to feel confident that the financial security of your loved ones will be safe from these and other threats. 

Our Palo Alto asset protection lawyers can help you implement Family Protection Trusts (FPTs) that work to safeguard inheritances you leave for your loved ones. FPTs are conceptually similar to dynasty trusts and are a form of irrevocable trust. Assets transferred from an FPT as part of an inheritance are considered “separate property” and will not typically be subject to equal division in a California divorce.  Inheritances dispersed through an FPT are also in many cases safe from litigation and creditors. 

To see the value of an FPT in practice, consider a scenario where your child someday becomes entangled in a messy divorce. Their partner is attempting to get as much as possible in the divorce settlement and knows you left your child a sizable inheritance. However, because that inheritance is managed through an FPT, the inherited assets are largely considered “separate property” and cannot be touched. Perhaps the divorcing partner successfully argues that inherited assets were intermingled and thus now qualify as community property. Through proactive planning, you directed your FPT to disperse your child’s inheritance in installments over a period of many years. While the divorcing spouse may be able to claim half of what they have inherited thus far, they will not be able to access the full extent of the inheritance, which will continue to be dispersed under the conditions and schedule you specified. 

At Gilfix & La Poll Associates LLP, we draw on our wide breadth of experience to help our clients anticipate and prepare for these types of eventualities. Our team understands how predatory parties come for inheritances and can utilize preventative tools and strategies to protect your beneficiaries in the years to come. Most of these asset protection measures must be enacted before you pass away, so it is important that you immediately consult a legal professional and start exploring your planning options.

Local Asset Protection Strategies in Palo Alto: Leveraging Community Resources

Living in Palo Alto, you are part of a vibrant community with access to numerous local resources that can aid in your asset protection planning. The City of Palo Alto offers various programs and services that can provide valuable information and support for residents looking to safeguard their assets. For instance, the Palo Alto City Library often hosts financial planning workshops that can give you insights into effective asset management strategies.

One common concern among Palo Alto residents is the high cost of living and the potential financial strain it can place on families. This makes it even more crucial to protect your assets from unforeseen circumstances. By working with our team, you can take advantage of local knowledge and resources to create a robust asset protection plan. We understand the unique financial landscape of Palo Alto and can help you navigate it effectively.

Additionally, Palo Alto's proximity to major tech hubs means that many residents have significant assets tied up in stock options and other investments. Protecting these assets from market volatility, creditors, and legal challenges is essential. Our team can help you implement strategies such as Private Retirement Plans (PRPs) and irrevocable trusts to ensure your investments are secure.

At Gilfix & La Poll Associates LLP, we are committed to helping Palo Alto residents protect their assets and secure their financial future. By leveraging local resources and our deep understanding of the community, we can provide tailored solutions that address your specific needs and concerns.

Contact Our Palo Alto Estate Planning Team Today

Learn more about how we can help you achieve asset protection by calling (650) 683-9200 or contacting us online.