In the world of asset protection OJ Simpson is our poster child. While he owes the Goldmans north of 30 million dollars he spent his time in a beautiful house practicing his golf game. Of course now he is in jail for other crimes. To secure his assets he homesteaded his home in Florida and lived off of several protected vehicles: life insurance, annuities, and retirement accounts. He also set up several trusts irrevocable trusts. However, one vehicle I am not aware that he used was a family limited partnership (FLP).
While the general public is somewhat familiar with the vehicles that I have previously alluded to, most of you have not heard of a family limited partnership. In most states FLPs allow creditors the ability only to achieve a charging order. The way a charging order works is that the creditor can only take the assets if the LLP distributes in some fashion to the partners. The creditor can seize the assets in the partners hands. However, if the LLP never distributes the assets to the partners then the creditor is out in the cold. Just like every other wolf, creditors get tired of waiting and will eventually go away. Disappearing either by the statute of limitations or for the mere fact that they have other fish to fry.
Some of these vehicles, if structure correctly, can avoid probate and estate taxes as well. FLPs are flexible, and work best with appreciable assets. Of course, not all asset protection plans can be structured by legal maneuvering by itself; you may still need some sort of malpractice, or other form of business insurance. However, you will most likely be able to save on insurance premiums if you did construct some sort of legal structuring. What I have seen in my practice is that Doctors are so overwhelmed with those on the seminar circuit that doctors end up doing so little.
Remember doc, an ounce of prevention is worth a pound of cure.
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