Asset Protection 101

Welcome to Asset Protection 101!

The Asset Protection 101 information website is dedicated to providing information and resources on Asset Protection Strategies. Asset protection and estate planning are very important to protect your assets and leave behind for your loved ones. There are many asset protection strategies which many will be discussed on this Asset Protection 101 information website. This Asset Protection 101 information website serves as your asset protection guide for best asset protection results.

Offshore asset protection strategies used to be very popular but nowadays offshore asset protection strategies are becoming more and more obsolete. Asset protection planning is often offered by asset protection groups and asset protection consultants and other asset protection legal services.

There is no one best asset protection strategy. Most asset protection strategies work on protecting some assets while other asset protection strategies are more effective in protecting different assets. Insurance policies, for example, are best asset protection strategies for protecting certain types of assets which we discuss on this Asset Protection Strategies information website. Forming multiple corporations (C corporation and S corporation) and limited liability companies (LLC) is also important in protecting your assets against lawsuits. Family limited partnership is another new asset protection strategy that can tremendously help you with asset protection while keeping your assets under your control.

This section discusses tax on qualified retirement plans and any additional tax on qualified plans. Qualified retirement plans seem like a good idea. But, how much tax do you have to pay on qualified retirement plans? Also, are non qualified plans tax deferred?

How much tax are Qualified Retirement Plans subject to?

You worked hard at your profession. You set money aside for retirement. You made maximum allowable, pre-tax contributions into your qualified retirement plan. With some savvy investing, and a little luck, you’ve managed to create quite a nest egg for yourself. In fact, you have come to the realization that between your qualified plan and your other investments, you may not need all of the income your qualified plan will produce.

So instead of liquidating your qualified plan on a systematic basis, you plan to wait until age 70 and take minimum distributions to preserve the value of the account for transfer to your heirs after you are gone.

Are qualified retirement plans a good idea when it comes to transfer of assets at death?

Most people don’t realize that the qualified plan that was such a great tax shelter during lifetime may be the most difficult asset to transfer at death.

What taxes are qualified retirement plans subject to?

Qualified plans are subject to multiple levels of taxation:

Estate Taxes

Estate Taxes can reduce the size of the plan up to 50%. Income taxes are paid by the beneficiary and can be offset by a deduction for the estate taxes paid that are attributable to the qualified plan.

Income Taxes

Income Taxes can reduce the balance up to an additional 38.6%. Income taxes are paid by the beneficiary and can be offset by a deduction for the estate taxes paid that are attributable to the qualified plan.

And, if the transfer is to a grandchild …

Generation-Skipping Transfer Tax

Generation-Skipping Transfer Tax could reduce the value of the asset even more. The generation-skipping transfer tax is a flat 50% tax that is only applied when the asset is transferring to a grandchild or other skipped generation.

Below are some estate planning profile checklist questions to help you determine if you need an estate plan.

1.	Estimated total net worth __________________
2.	Do you have a will?	Y/N
3.	Do you have a will that takes advantage of the $1,000,000 exemption equivalent?	Y/N
4.	Do you have a will that takes advantage of the $1,120,000 Generation Skipping Exemption?	Y/N
5.	Do you have trusts in Will for children and grandchildren?	Y/N
6.	Do you have all assets titled properly to take advantage of the $1,000,000 exemption and the $1,120,000 Generation Skipping Exemption?	Y/N
7.	Do you have liquid assets set up in their tax exempt estate (outside their estate) to pay estate taxes.	Y/N
8.	Have you done financial projections to determine your exposure to estate taxes in the future?	Y/N
9.	Have you claimed maximum discounts on any gifts your made?	Y/N
10.	Have you reviewed/created a buy/sell agreement for your business?	Y/N
11.	Have you done the proper planning so you don’t fall into the IRA / Qualified Plan trap (up to 70% of retirement plan to the government)?	Y/N
12.	Do you have mandatory or discretionary income in the unified credit trust?	Y/N

• Tax Qualified Retirement Plans