When people in North Dakota plan for the future, they may be concerned about how to best protect their assets and ensure that they reach their intended beneficiaries. Especially in times of economic crisis, bankruptcies and financial disputes that proceed to court can be all too common. Some transfers of funds can be ruled null and void if they are considered fraudulent conveyances, serving as an attempt to protect assets from creditors rather than serving an additional legitimate purpose. There are some types of consideration that can prevent transfers from being treated as if they were fraudulent in a bankruptcy or litigation context.
These include adding funds to a protective trust to provide for a spouse or children upon death, transferring funds or assets in exchange for a share in an LLC or LLP, or transferring funds to an annuity that is designed to provide protection from creditor claims. There are certain provisions that can help to protect assets in a trust, including ensuring that an independent trustee makes decisions about the use of the funds, providing some limitations on how the trust assets may be used, and creating the trust in a state that provides greater protection for assets.
Other trusts, like a split interest trust or a grantor retained trust, may work as an annuity where the person who created the trust receives an ongoing annual income from the trust’s assets. In addition, limited liability companies can help to protect assets. However, if the LLC exists in name only, the courts may ignore the LLC and treat it as if it were personal property instead.
People engaged in business may want to consider how they can protect their loved ones and their future. An estate planning attorney might help them to develop trusts and other key estate documents to guard their assets.
