Effective planning is intended to protect assets within the law—not to hide assets, defraud creditors, or evade taxes.
Why Asset Protection Matters for Women
Women may benefit from asset protection planning because:
• Women often live longer and need assets to last longer.
• Many women manage finances independently due to divorce, widowhood, or remaining single.
• More women own businesses and professional practices.
• A comprehensive plan can help promote long-term financial security and independence.
Insurance as the First Line of Defense
Insurance is often the simplest and most effective way to transfer financial risk. However, insurance alone may not provide complete protection. Additional strategies may involve transferring ownership of assets to legal entities such as corporations, LLCs, partnerships, or trusts.
Business Entity Strategies
Common business structures used in asset protection include:
• C Corporation – Separates business assets from personal assets when corporate formalities are properly maintained.
• Limited Liability Company (LLC) – Provides liability protection while generally allowing pass-through taxation.
• Professional Corporation (PC) and Limited Liability Partnership (LLP) – Often used by licensed professionals to help protect owners from liabilities arising from the actions of business partners.
Family Limited Partnerships (FLPs)
Family Limited Partnerships can hold family-owned businesses or investment assets. Creditors are generally limited to receiving distributions through a charging order rather than gaining direct access to partnership assets, which may discourage litigation.
Trust-Based Asset Protection
Several trust structures may enhance asset protection:
• Protective Trusts – Provide income or distributions for beneficiaries while limiting creditor access.
• Irrevocable Trusts – Assets transferred into an irrevocable trust are generally beyond the reach of creditors because the grantor gives up control.
• Domestic Self-Settled Trusts – Available in certain states and may provide additional creditor protection when properly established.
• Offshore (Foreign) Trusts – May provide additional legal barriers for creditors because assets are held under foreign jurisdiction.
Important Considerations
Asset protection strategies involve complex legal and tax issues. Before establishing business entities or trust arrangements, consult qualified legal, tax, and financial professionals to determine which strategies are appropriate for your situation.
Disclosure
This document is a reformatted version of the original Janney/Broadridge educational brochure.
