Asset Protection: Tax & Financial Aspects (17.5 hrs)

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
Learning Objectives
After reading Chapter 1, participants will be able to:

1. Specify the goals and purposes of asset protection, the objections some people have about shielding assets from creditors, and reasons for asset protection.
2. Identify situations that put assets and financial security at stake and the common sources of lawsuits, recognize the dual concepts of liability, and determine the asset protection concepts of insurance, asset placement, and statutory protections.
3. Specify the types of creditors associated with asset protection and fraudulent transfers recognizing their salient characteristics and identify the fraudulent transfer provisions, badges of fraud, statutes of limitation, and potential criminal penalties.
4. Determine 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.

Protecting Assets: Insurance

At the start of Chapter 2, participants should identify the following topics for study:
* Homeowner’s, automobile, and disability insurance
* Life insurance
* Annuities
* Buy-sell agreements
* Entity & cross-purchase agreements
* Purchase price & terms
* Community property
* Professional corporations
* S corporations
* Sole shareholder planning
Learning Objectives
After reading Chapter 2, participants will be able to:

1. Identify characteristics of homeowner’s, automobile, and disability insurance and what asset protection they may offer.
2. Specify persons in which rights are placed by life insurance and reasons to purchase life insurance and the benefits, uses, and types of life insurance, and identify variables that influence when life insurance is taxable.
3. Determine what constitutes an annuity and the types and characteristics of annuities specifying their tax advantages and disadvantages, and recognize the types of buy-sell agreements recognizing their tax and legal advantages and pitfalls.

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
* Co-tenancy
* Partnership taxation & recapitalization
* Family partnerships
* Limited liability companies
* Retirement plans
Learning Objectives
After reading Chapter 3, participants will be able to:

1. Recognize the ways to hold property and what taxpayers must do before beginning an asset protection program.
2. Specify the advantages and disadvantages of using placement entities and titles such as joint tenancy, corporations, trusts, partnerships, LLCs, retirement plans, and custodianship for asset protection purposes.
3. Identify the advantages and disadvantages of a limited liability company (LLC) and problems associated with its relatively recent history.
4. Recognize how retirement plans can be used to provide substantial lifetime benefits to a business owner and to employees while simultaneously providing asset protection.
5. Identify important characteristics of custodianship and estates as asset protection tools.

Protecting Assets: Bankruptcy

At the start of Chapter 4, participants should identify the following topics for study:
* Tax law changes
* Bankruptcy types
* Automatic stay
* Preferences
* Priorities
* Debt discharge
* Individual bankruptcy estate
* Individual debtor
* Corporate bankruptcy
* Homesteading & garnishment
Learning Objectives
After reading Chapter 4, participants will be able to:

1. Determine how the 2005 Bankruptcy Act changed procedures, identify the most common bankruptcy types and their filing requirements, specify the rules for automatic stay, and identify preferential payments specifying the priority of creditor claims.
2. Specify debts covered under homesteading, and determine permissible garnishment amounts recognizing special garnishment rules.

Avoiding Tax on Debt Cancellation & Foreclosure

At the start of Chapter 5, participants should identify the following topics for study:
* Qualified farm debt exclusion
* Real property business debt
* General ordering of tax attribute reduction
* Reduction of tax benefits
* Basis reduction
* Partnership bankruptcy
* Corporation stock-for-debt rule
* S corporation bankruptcy
* Foreclosure
* Discounted acquisition of debt
Learning Objectives
After reading Chapter 5, participants will be able to:

1. Recognize the effect that debt cancellation has on net worth and potential income inclusion from cancellation of indebtedness income, and specify exceptions to the general income inclusion rule and their tax impact.
2. Identify tax attribute reductions and their application when reducing canceled debt and recognize the depreciable property election in reducing the basis of depreciable property before reducing any other tax attributes.
3. Determine gain or loss resulting from foreclosure or repossession identifying reporting and filing requirements, specify the timing and character of the gain or loss, and cite the hidden income tax danger when acquiring one’s own debt at a discount.

Divorce Settlements & Divisions

At the start of Chapter 6, participants should identify the following topics for study:
* Premarital agreements
* Application of §1041
* Incident to divorce
* Property basis
* Purchase of residence between spouses
* Purchase of business & investment property between spouses
* Division of corporate business interests
* Division of partnership business interests
* Deferred v. present division of benefits
* Individual retirement arrangements
Learning Objectives
After reading Chapter 6, participants will be able to:

1. Identify the formats that courts typically follow if a couple does not have a marital agreement including how search agreements relate to divorce settlements and divisions.
2. Determine the application of §1041 to interspousal transfers and the transferor’s and transferee’s property basis under §1041(b).
3. Specify the application of §1041 to selected business, retirement, and investment assets and identify the elements of a Qualified Domestic Relations Order (QDRO).

Protecting Assets from Old Age & Catastrophic Illness

At the start of Chapter 7, participants should identify the following topics for study:
* Managing the estate
* Medicare
* Medicaid & countable assets
* Medicaid & non-countable assets
* Medicaid & inaccessible assets
* Private insurance
* Healthcare decisions
* Supplemental Security Income
* Income & assets
* Disability benefits
Learning Objectives
After reading Chapter 7, participants will be able to:

1. Specify the tools to manage an incompetent person’s estate including powers of attorney, trusts, and conservatorship.
2. Determine eldercare benefits of Medicare and Medicaid, identify possible health care decisions such as having a power of attorney for health care, and recognize distinctions between Supplemental Security Income and Social Security disability benefits.