If you are an investor, business owner or a high-net-worth individual in Illinois, asset protection is a must. Lawsuits, creditor claims, divorce and other risks can all cause significant financial losses. However, there are strategies available that you can use to protect your assets.
Protecting your assets before a divorce starts when you are tying the knot. A prenuptial agreement is an arrangement entered into by two people before marriage stipulating how they will divide their property in the event of a divorce. It also addresses other issues like spousal support and debt obligations. It’s important to ensure that your agreement is fair and reasonable because there are circumstances where a judge may reject it.
One of the surest ways to protect your assets is to establish a trust. Essentially, you transfer your properties to a third party and assign them the responsibility of managing them. This way, in case of any legal issues, a judge won’t be able to access your properties as they are no longer yours.
In Illinois, a limited liability company can help protect the owner from debts and other financial setbacks that may arise. However, it isn’t foolproof against a divorce. Your membership interests may be subject to division, especially if you started the business after marriage.
Some people have resorted to creating an LLC owned by an international trust. The trust registered in another country then owns the LLC. As a result, it’s more difficult to access and divide the business assets. Another alternative is to create an operating agreement that expressly states that your spouse doesn’t have membership or ownership interest in the LLC.
Whatever strategy you decide to pursue, it’s wise to know the ins and outs of Illinois asset protection law. It’s also important to consider the cost of setting up trusts and other structures. And consider revisiting the strategy regularly to keep it updated and valid. This way, you can rest easy knowing your assets are safe no matter what comes your way.