Level One – Basic Estate: Basic estate planning for the professional or business owner, which includes a revocable living trust, wills, durable powers of attorney, and related estate planning documents. Note also that not all revocable living trusts are the same. When appropriate, The Goralka Law Firm utilizes trust provisions that provide substantial asset protection features that protect your children or other loved ones from divorce or other creditors, while still retaining the functional equivalent of ownership.
Level Two – Business Income Protection: The second level of estate planning establishes protection for the operating business for which the business owner or professional, which usually provides the primary source of income. This level may also include the formation of separate entities for the protection of real estate investments.
Level Three – Maximize Existing Legal Exemptions: Level three focuses on planning to maximize the available exemptions under Federal and California or State law. Federal law includes exemptions for Individual Retirement Accounts and qualified retirement plan accounts. California and State law provide exemption for annuities, homesteads, and the treatment of creditor's claims against a non-working spouse.
Level Four – Limited Liability Entities: Level four provides for the use of limited liability entities to protect investment assets. Those entities may be formed to take advantage of the laws in other jurisdictions such as Nevada, Alaska, Delaware or Wyoming.
Level Five – Advanced Estate Planning Strategies: Level five utilizes advanced estate planning techniques. These strategies include, but are not limited to, Irrevocable Life Insurance Trusts (ILITs), Qualified Personal Residence Trusts (QPRTs), Grantor Retained Annuity Trusts (GRATs) and Charitable Remainder Trusts (CRTs).
Level Six – Domestic Asset Protection Trusts/The Hybrid Bridge Trust: Level six builds on the earlier levels and utilizes limited liability entities in conjunction with Domestic Asset Protection Trusts. Level six utilizes self-settled trusts with a situs in a jurisdiction with State laws protecting the estate from claims and lawsuits. Eleven states, including Alaska, Nevada, and Delaware have enacted legislation that provides these asset protection features. The Hybrid Bridge Trust provides a unique combination of the benefits and enhanced protection provided by a foreign Asset Protection Trust with the lower cost and flexibility of the Domestic Asset Protection Trust.
Level Seven – Foreign Asset Protection: Level seven utilizes offshore or foreign entities to provide even stronger asset protection from creditors. The assets are taken outside the jurisdiction of the United States courts. The offshore entities may also enjoy more favorable laws in these jurisdictions to enhance the protection of assets.