Asset Protect Strategies in Maine
You’ve worked hard for what you’ve earned. But one simple mistake or incident could see it all taken away. Protecting your assets should be a priority if you intend to leave a legacy for future generations. At Jackson & MacNichol, we can help you protect your personal and business assets from creditors, lawsuits, and taxes.
What asset protection strategies do you need in Maine?
I own a small business, how can I protect my assets in case I am sued?
Your business could face liabilities from several sources: product liability, copyright infringement, sexual harassment, employment discrimination, malpractice, breach of contract, worker’s compensation… You don’t want any of these business liabilities to affect your personal assets. But if you operate your business as a sole proprietorship or a partnership, you are completely vulnerable.
Fortunately, you can protect yourself by incorporating your small business or forming a Limited Liability Company (LLC). The nature of your business, your partners, and its growth potential will determine the best corporate structure to choose. And once you’ve formalized your business, you can get additional protection by purchasing business insurance.
I own rental property, how can I protect my assets?
There are two reasons why you may not want to own your rental properties directly. You want to protect your business from your personal issues, and you also want your personal finances to be protected from the ups and downs of your business. You can accomplish this by setting up a corporation or a trust to hold your rental properties.
Although everyone’s situation is different, the most common scheme for protecting a rental property is setting up a Limited Liability Corporation (LLC). This corporate structure offers significant tax advantages while also protecting your personal assets from business liabilities. If you have multiple rental units, you may also want to consider setting up a separate LLC for each one.
I own a home and want to leave it to my kids, what do I need to know?
Unlike many states, Maine does not currently recognize transfer-on-death (TOD) deeds, also known as beneficiary deeds. As the name suggests, these deeds transfer ownership to the other named person on the deed immediately upon your death. In the absence of this legal mechanism, there are still several ways you can transfer your property to your kids upon your death.
The most obvious solution is putting the house in your will, but this means that it will need to go through probate, which you may want to avoid. You can avoid probate by putting the home into a trust and naming your kids as the beneficiaries. But setting up a trust comes with upfront legal costs. Another option is to enter a joint tenancy with your children, so that when you die, your interest automatically passes to them.
A final consideration to take into account is your children’s preferences. If they inherit your property, they may not want to share it. Or one child may want to sell their share to pay off a debt, putting them at odds with the rest of the family. Including your children’s wishes in the estate planning process and setting up the property transfer accordingly can avoid a lot of headaches down the road.
How can I keep my camp in my family for generations to come?
Along the many lakes, ponds, and coastlines in Maine, there are many camps or cottages that have been in a family for generations. If you want to keep your property in your family for future generations’ enjoyment, you can use several estate planning tools.
A trust can own family property and set forth the terms of its future use and management. At Jackson & MacNichol, we also recommend Limited Liability Companies instead of a trust for this purpose. Either way, an entity to hold a family camp offers you the ability to set guidelines for how the property will be used and shared well into the future.