Asset Protection Planning in California 

Solano County law firm develops comprehensive strategies

Asset protection is an important corollary of estate planning. While you are preparing for how your assets will be distributed upon your death, you also should take steps to protect those assets from potential threats during your lifetime. At Favaro, Lavezzo, Gill, Caretti & Heppell, PC, we take a comprehensive approach that makes strategic use of tools to accomplish both purposes, helping ensure that your wealth is safeguarded for you and for your intended beneficiaries. Based in Vallejo, California, we serve clients in the North Bay Area and throughout Solano County. 

What is asset protection? 

Multiple asset protection techniques can be used to shield your individual or business assets from liabilities arising from debts, taxes or lawsuits. Many of these techniques involve moving property into a separate entity, such as a trust or corporation. Some strategies can also be part of your estate planning. Asset protection can be vital if you have high-value assets, such as homes, vacation properties, investments, business ownerships, retirement accounts, cryptocurrency and digital assets. We will discuss with you your financial portfolio and personal circumstances in order to develop an asset protection plan that is best suited to you and that complies with legal strictures.

What are valid purposes for protecting assets? 

Asset protection methods must be for legitimate purposes and not for frustrating or defrauding claimants. Examples of valid reasons for asset protection are:

  • Protecting against future lawsuits 
  • Preserving wealth for heirs 
  • Shielding assets from business risks 
  • Guarding against divorce or remarriage complications 

Asset protection cannot be used to evade known creditors or litigants, to hide assets or to defraud tax authorities. 

Common asset protection strategies

There are a variety of ways to protect assets depending on a person’s needs. The following are some common strategies you can use:

  • Establish irrevocable trusts to hold your assets separately, which serve the dual purpose of keeping them out of your probate estate. 
  • Use the California homestead exemption to safeguard a portion of your equity in primary residences.
  • Set up a limited liability company (LLC) to separate your business and personal assets.
  • Take out umbrella life insurance policies to cover potential claims.
  • Make gifts to beneficiaries during your lifetime, thus removing assets from your estate.
  • Establish retirement accounts such as 401(k)s and IRAs, which often have built-in legal protections.
  • Enter a prenuptial agreement to protect your assets in case of divorce.

A combination of these methods may be used to achieve the most robust protection based on your assets, family situation and objectives. 

Asset protection compliant with state law

Your asset protection strategy must comply with state law to be viable. For example, California does not allow self-settled asset protection trusts, which in some states can be set up to shield assets from creditors. Also, actions like setting up offshore accounts or creating shell owners are suspect and should be avoided. Our lawyers have in-depth knowledge of the legal considerations of asset protection planning in California. You can trust that the strategies we develop will be valid and enforceable. 

Contact an experienced California law firm for asset protection guidance

Favaro, Lavezzo, Gill, Caretti & Heppell, PC, located in Vallejo, guides clients throughout the North Bay in all aspects of estate planning, including implementing asset protection strategies. Call us at 707-674-6057 or contact us online to schedule a consultation.