978.319.6006 | info@jpestateplanning.com

Asset Protection for Physicians, Dentists, Attorneys, and High Risk Business Owners


Asset Protection for children who may need help from themselves due to Poor Money Skills, Substance Abuse, or Potential Divorce

Solutions may include Domestic Asset Protection Trusts
and other Strategies

As for Doctors, Dentists, Attorneys, and other High Risk Business Owners, they may often face personal liability for malpractice in the normal course of their business dealings.  Often insurance will not pay for these claims or the claims may exceed the amount of coverage.  There is very well settled law that affords these individuals the opportunity to shield personal assets from business liability through the use of various advanced trusts.  While the trust assets may be out of the reach of creditors, the professional and their family may still have access to the assets in the trust.  These trusts generally will not afford protection if the trust is drafted and funded after a potential liability or claim arises. 

Strategies these high risk professionals can use to shield and shelter personal and family assets from creditors may include:
  • Domestic Asset Protection Trusts (DAPT)
  • Business entity structures and strategies (FLP, LLC, FLLC)
  • Offshore Asset Protection Trusts
  • Equipment and Asset lease and leaseback arrangements

Solutions may include Lifetime Trusts with Spendthrift Provisions

For a troubled child, if the parents have properly structured their trust it can provide asset protection for the beneficiaries, with two important caveats. First, the assets must remain in the trust to provide ongoing asset protection. In other words, once the trustee distributes the assets to a beneficiary, those assets are no longer protected and can be attached by that beneficiary's creditors, and used for anything the child desires and often squandered. If the beneficiary is married, the distributed assets may also be subject to the spouse's creditor(s), or they may be available to the former spouse upon divorce.

Trusts for the lifetime of the beneficiaries provide prolonged asset protection for the trust assets. Lifetime trusts (discretionary trusts) also permit your financial advisor to continue to invest the trust assets as you instruct, which can help ensure that trust returns are sufficient to meet your planning objectives. The second caveat follows logically from the first: the more rights the beneficiary has with respect to compelling trust distributions, the less asset protection the trust provides. Generally, a creditor 'steps into the shoes' of the debtor and can exercise any rights of the debtor. Thus, if a beneficiary has the right to compel a distribution from a trust, so too can a creditor compel a distribution from that trust.  A properly crafted and drafted trust for the benefit or your child will leave the distributions up to the discretion of a 'dis-interested' trustee, thus continuing to provide support for your child.