Supreme Court: IRA Protected In Bankruptcy- In a unanimous decision, the Supreme Court ruled that creditors may not seize Individual Retirement Accounts (IRAs) when people file for bankruptcy. IRAs should not be treated any differently because the benefits are tied to people's ages, the court said, citing a substantial tax penalty that is imposed for withdrawals before a person turns 60. "That penalty erects a substantial barrier to early withdrawal," Justice Clarence Thomas wrote for the court. "Funds in a typical savings account, by contrast, can be withdrawn without age-based penalty." The case involved a rollover IRA from employer-sponsored pension programs.
Landlords may consider forming an LLC to hold title to rental properties, rather than owning property personally as a sole proprietor. Tenant lawsuits, arising from your rental property, such as a death or serious injury, can be awarded millions of dollars, exceeding your insurance coverage and driving you into bankruptcy, losing all of your assets. Real estate can be owned by a Self-Directed IRA. An IRA can also own an LLC.
Small business owners should consider forming a corporation or LLC, rather than operating as a sole proprietor.
In some cases, incorporating in Nevada, Wyoming, or Delaware may be a better strategy than incorporating in your home state. You should have the proper legal nexus, file proper documents, keep proper records and follow applicable laws. We can provide you with information so you can make an intelligent decision on which entity is best for your situation.
Manage, control and protect your assets from losses and lawsuits. Asset protection is part of a good financial plan and must be done before a problem occurs. Protecting your assets before a lawsuit occurs is a wise strategy to preserve your wealth.
New Bankruptcy Law:
On October 17, 2005, the U.S. had the largest change in bankruptcy law in 25 years. The new law, called the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), will make bankruptcy a less desirable option for consumers and small businesses. It changes the U.S. bankruptcy law from debtor-friendly to creditor-friendly. Think twice before taking on too much debt or use non-recourse loans where you are not personally liable for repayment.
Currently, debtors who file Chapter 7 bankruptcy can wipe out their financial debt. With the new law, they will be required to file Chapter 13 bankruptcy, meaning they will have to pay back part of their debts if their income is higher than the median for their state.
Community Property States:In community property states, most property, assets, debts, and income acquired during a marriage (except for gifts and inheritances) is considered to be community property, owned jointly by both spouses, regardless of how the ownership of the property is actually titled, and is divided equally upon divorce, annulment or death.
In other states, known as common law states, married persons can have individual and joint property, assets, debts, and income. The way the property is titled determines the ownership. Generally, property that each person acquires before the marriage, after legal separation, or that is received by gift or inheritance, is called separate property. To maintain separate ownership, do not commingle separate funds or property with joint funds or property.
Upon divorce, spouses may negotiate a property settlement agreement, or separation agreement, or courts will decide how property is divided, based on state laws and an equitable (fair) division.
You may wish to consider signing a pre-marital agreement and the effects of moving to another state on your property and income ownership and estate planning. If you own or buy real estate in another state, the laws of the state where the real estate is located will apply to that property, regardless of where you live.
Seek qualified legal and tax counsel for
questions about community property, common law property or marital
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin. Puerto Rico. Alaska (upon election by the spouses)
Contact us for information on asset protection.Disclaimer: Advisor Financial Services does not offer legal, tax, or investment advice. Contact a licensed, qualified professional for legal, tax, or investment advice.
of this website, our contact information or our services confirms your agreement and acceptance of our