Your resources are hard-earned, and you certainly don’t want to lose any of the ground that you have seized. Preservation is key, and we will look at LLC asset protection strategies first.
LLC Asset Protection Strategies
Are you the owner of a small business? If you answer this question in the affirmative and you are a sole proprietor, you are at risk. There is no legal separation between your personal interests and the interests of your business.
You can change the playing field if you establish a limited liability company (LLC). When you take this step, for the most part, your personal assets will be protected from legal actions taken against your business.
There is an exception to the rule. If you are personally negligent and you injure someone in the process of doing your job, your personal property could potentially be targeted.
On the other side of the equation, if you run into financial or legal troubles as an individual, the limited liability company and its interests would be protected unless a court issues a charging order.
A limited liability company is an effective asset protection entity when it comes to events that occur after the LLC has been established. However, you cannot decide that you are going to use LLC asset protection strategies after a legal action has been initiated.
Family Limited Partnerships
Another legal entity that can be used to protect assets is the family limited partnership. To explain through the use of an example, let’s say that you own two apartment buildings. You can convey each one of them into a separate family limited partnership.
If someone is injured in one of the buildings, personal property that is owned by the partners would be protected, and this would also apply to the other apartment building.
Conversely, the property that is held by the family limited partnerships would be protected if any partner is sued.
With regard to the structure, if you establish a family limited partnership, you would be the general partner. Family members that you add would be the limited partners. As a result, you would retain sole decision-making authority.
In addition to the asset protection benefits, family limited partnerships can be used to facilitate estate tax efficient transfers among partners. The federal estate tax is applicable on estates that exceed $13.61 million in 2024.
Other Estate Tax Efficiency Strategies
This federal estate tax carries a 40 percent maximum rate, so it can have a heavy impact on the legacy that you will be passing along if you’re a high net worth individual. There is no state estate tax in Louisiana, but there are estate taxes in 12 states.
If you own valuable property in one of the states, the tax there would be a factor if its value exceeds the exclusion. The 12 states with estate taxes are Connecticut, New York, Vermont, Oregon, Massachusetts, Minnesota, Maine, Hawaii, Illinois, Rhode Island, Washington, and Maryland. There is also an estate tax in the District of Columbia.
The state-level exclusions are typically lower than the federal exclusion – in some cases, much lower. For example, the Oregon estate tax exclusion is just $1 million.
In addition to family limited partnerships, there are a number of different types of irrevocable trusts that can be used to facilitate asset transfers at a tax discount. These would include the grantor retained annuity trust, generation-skipping trust, qualified personal residence trust, and charitable lead trust.
Self-Settled Asset Protection Trust
A self-settled asset protection trust can be used to protect your personal assets from creditor claims that present themselves after you have created the trust. This device is alternately referred to as the domestic asset protection trust.
When you convey assets into the trust, you can no longer access the principal, and you cannot act as the trustee. An independent trustee that resides in the state where you establish the trust would manage the assets, and they could provide you (or someone of your choosing) with distributions at their discretion.
These trusts are not recognized in Louisiana, but someone in our state could establish an asset protection trust in a state that does recognize them.
Nursing Home Asset Protection
Most senior citizens will need paid living assistance of some kind, and 35 percent of elders will reside in nursing homes. Medicare does not pay for the custodial care that nursing homes and in-home caregivers provide, and custodial care is very expensive.
Medicaid is an alternate government health insurance program for people with limited resources, and it does cover long-term care. You could convey assets into an irrevocable, income-only Medicaid trust in an effort to gain future eligibility.
The “future” part is important because there is a five-year look-back period. You have to fund the trust at least five years before you submit your application for Medicaid coverage.
Remarriage Asset Protection
If you have significant resources and you are getting remarried, you may want to work with your prospective spouse to establish a premarital agreement. You can add a qualified terminable interest property trust to protect inheritances that you want to leave to your children.
Your spouse would receive distributions of the trust’s earnings if you were to predecease them, and your children would inherit the remainder after the death of your spouse. With this type of trust, your spouse would benefit during their life, but they would not be able to change the terms.
Attend a Free Seminar!
We are conducting some seminars over the coming weeks that will convey a great deal of very useful information. There is no charge to attend the sessions, and this is an ideal way to connect with our firm for the first time.
To see the dates and obtain registration information, head over to our estate planning seminar schedule page.
Need Help Now?
We are here to help if you are ready to work with a licensed attorney to put a plan in place. You can schedule a consultation at our Metairie, Louisiana estate planning office if you call us at 504-831-2348, and you can use our contact form to send us a message.
- National Make-a-Will Month - August 1, 2026
- Dying Without a Will in Louisiana: Can Unexpected Heirs Inherit? - July 22, 2026
- Don’t Wait For A Crisis: Begin The Long-Term Care Talk With Parents Now! - July 20, 2026
