Asset Protection - 24 CPE Credit Hours
This informative course covers traditional planning tools and their utilization to protect assets. The Uniform Fraudulent Conveyance Act, the Bankruptcy Code and various aspects of the tax law are highlighted in describing asset protection aspects of corporations, partnerships, limited liability companies, family partnerships, trusts, retirement plans, insurance products and other conventional tools. Special topics include: protection against lawsuits, costs of long-term illness, divorce settlements, foreign asset protection trusts, statutory protections, homestead provisions, exempt assets, cancellation of indebtedness taxation and marital agreements.
Completion Deadline & Exam: This course, including the examination, must be completed within one year of the date of purchase. In addition, unless otherwise indicated, no correct or incorrect feedback for any exam question will be provided.
Course Level: Overview. This program is appropriate for professionals at all organizational levels.
Field of Study: Taxes
Prerequisite: General understanding of federal income taxation.
Advanced Preparation: None
Learning Assignments & Objectives
As a result of studying each assignment, you should be able to meet the objectives listed below each assignment.
Chapter 1 Introduction to Asset Protection
At the start of Chapter 1, participants should identify the following topics for study:
* Situations that create danger
* Sources of lawsuits
* Types of liability
* Basic protection concepts
* Types of creditors
* Badges of fraud
* Statute of limitations & criminal penalties
* Permissible asset transfers
* Asset protection goals
* Preparation for asset protection
After reading Chapter 1, participants will be able to:
1. List the goals and purposes of asset protection, recognize the objections some people have about shielding assets from creditors, and state at least six reasons for asset protection.
2. Identify sixteen situations that can unexpectedly put assets and financial security at stake, and list eighteen common sources of lawsuits.
3. Recognize the author's concept of exploding and imploding liability and show how dealing with them is necessary for complete asset protection plan, and define the concepts of insurance, asset placement, and statutory protections when applied to asset protection.
4. Name three types of creditors associated with asset protection and fraudulent transfers noting salient characteristics as to each.
5. Outline the various fraudulent transfer provisions, particularly the uniform acts, which protect current and future creditors, list several badges of fraud in the Uniform Fraudulent Transfer Act and recognize their effect on transfers, state the statute of limitations and potential criminal penalties associated with such fraudulent transfers, and do the differences between fraudulent asset transfers and permissible asset transfers.
6. Define net worth using a balance sheet, identify asset values, and show the preparation of a balance sheet in the context of determining the depth and scope of suitable asset protection planning.
After studying the materials in Chapter 1, answer the exam questions 1 to 26.
Chapter 2 Insurance
At the start of Chapter 2, participants should identify the following topics for study:
* Homeowner’s, automobile and disability insurance
* Life insurance
* Buy-sell agreements
* Entity & cross-purchase agreements
* Purchase price & terms
* Community property
* Professional corporations
* S corporations
* Sole shareholder planning
After reading Chapter 2, participants will be able to:
1. List the major characteristics of homeowner's, automobile, and disability insurance noting asset protection they may offer.
2. Name the four parties in whom rights are placed under a life insurance contract, list the benefits, uses and types of life insurance, identify three variables that influence whether life insurance is taxable for federal estate tax purposes, and state reasons for establishing an irrevocable life insurance trust in order to achieve several estate tax planning advantages.
3. Define annuities, state the types and characteristics of annuities, and list some of their tax advantages and disadvantages.
4. Identify buy-sell agreements, list the differences between an entity purchase agreement and a cross purchase agreement, and define purchase prices and terms of buy-sell agreements, risks of having stock as community property and concerns about shares held by professional corporations, S corporations, and sole shareholder planning.
After studying the materials in Chapter 2, answer the exam questions 27 to 41.
Chapter 3 Asset Placement
At the start of Chapter 3, participants should identify the following topics for study:
* Individual titles & sole proprietorship
* Categories of C corporations
* S corporations
* Types of trusts
* Trust taxation
* Partnership taxation & recapitalization
* Family partnerships
* Limited liability companies
* Retirement plans
After reading Chapter 3, participants will be able to:
1. Name nine basic ways to hold property, state what taxpayers must do before beginning an asset protection program, and list the advantages and disadvantages of holding property individually and through a sole proprietorship and how these pitfalls can be avoided.
2. List five basic guidelines that corporate business owners should follow to protect their corporations and two issues regarding potential personal liability for shareholders, officers and directors, identify six protection ideas for corporate business owners, and list six §469 passive loss restriction considerations.
3. List the advantages and disadvantages of using a corporation in asset protection planning, show the differences among the three categories of C Corporations, recognize the importance of S corporations and their estate tax planning advantages, and list the advantages and disadvantages of transferring farmland to a corporation.
4. Identify testamentary trusts, living trusts and at least eight subcategories of trusts, and state where changes may be necessary when using them for asset protection planning.
5. Show how different trusts are taxed with regard to income tax, estate tax and gift tax, outline the grantor trust rules and the effect of the treatment on owners for income tax purposes, and list the tax consequences of several trust types.
6. Recognize the various types of co-tenancy and their impact on asset protection and tax liability.
7. Define partnerships and their various types, name four ways that partnerships may be better than corporations from an estate-planning viewpoint, outline how partnerships are taxed and how estate freezing works to minimize death taxes on estate assets, and outline the structuring of familypartnerships.
8. List the advantages and disadvantages of a limited liability company (LLC), the problems associated with its newness, and state how professional firms, joint ventures, and families can benefit from establishing LLCs.
9. Recognize how retirement plans can be used to provide substantial lifetime benefits to a business owner and to employees while simultaneously providing asset protection.
10. Identify important characteristics of custodianship and estates as asset protection tools.
After studying the materials in Chapter 3, answer the exam questions 42 to 67.
Chapter 4 Bankruptcy
At the start of Chapter 4, participants should identify the following topics for study:
* Tax law changes
* Bankruptcy types
* Automatic stay
* Debt discharge
* Individual bankruptcy estate
* Individual debtor
* Corporate bankruptcy
* Homesteading & garnishment
After reading Chapter 4, participants will be able to: