Protecting Your Hard Earned Assets

In today?s world, many people are beset with problems of debt. Possessing large amounts of debt, whether owed to the bank or to a credit card, has become the sign of our times. In such light, many seek out ways to preserve what they have and protect it from their creditors should the worst happen to them financially.

One simple way, a way which many currently benefit from, is to keep non-business assets jointly with your spouse. Pennsylvania recognizes that property, real and personal, held jointly by a married couple cannot be levied or sold to pay for the debts of only one spouse. This is otherwise known as a ?tenancy by the entireties.? For example, if the mortgage for your marital home is in your name only and is very overdue, the bank cannot foreclose on the house until only you own it.

Domestic trusts are another method. A trust places assets from your control into the care of a trustee, only to be disbursed upon certain conditions to a beneficiary. The most well-known usage of a trust is to generate a reservoir of funds to be portioned out to one?s children, in essence granting an allowance without permitting them to reach the entire sum of the assets. If properly formed, trust principal and income cannot be touched by creditors until it is removed from the trust to be used for a beneficiary.

You can also directly transfer your assets to another family member, although this method is far from foolproof. Because these kinds of transfers are very direct, they are consequently more easily attacked by creditors. Also, if done improperly, like any other transfer of property to a shelter, a conveyance to a family member may be seen as an attempt to defraud those you owe money to.
If done properly, there are many ways to shield your assets. Never forget that there are laws to prevent people from blatantly cheating their creditors. Any transfer of assets can be attacked by your creditors as an attempt to defraud them. Always consult an attorney to be sure to avoid such pitfalls.

ABOUT THE WRITERS: Thomas P. Heeney, Jr., Esquire and Stephen F. Gehringer, Esquire are attorneys of Heeney & Associates, P.C. HEENEY & ASSOCIATES, P.C. is a full service law firm for businesses, professionals and individuals alike. Living by the firm slogan of “Get the LEGAL Edge!”, the goal of HEENEY & ASSOCIATE’S is to assist its clients in business, home and life transactions by identifying potential risks and/or problems before the issues adversely affect our clients. It is by identifying potential risks and/or problems for our clients, HEENEY & ASSOCIATES gives its clients the LEGAL Edge! (215) 766-8337.

DISCLAIMER: This column is a service providing only general legal advice. The information is not meant to be acted upon without proper legal assistance. As with all such matters of the law, anyone requiring legal help is strongly encouraged to seek the aid of an attorney.