Stephen Drake, Ph.D, CPA, CGMA, CFP ®
I. Determine Possible Sources of Liability
A. Professional Malpractice
B. General Torts (auto accident, etc.)
C. Contract Claims
D. Creditor Exposure
E. Officer and Director Liability
F. Environmental Liability
G. Divorce
H. Forced Heirship (i.e. Right of Election)
I. Political Threats
J. Economic Risks
K. Existing Lawsuits
II. Insurance Adequacy Analysis
A. Homeowners
B. Auto
C. Umbrella
D. Business Risks
E. Directors and Officers
F. Disability
G. Life
H. Property and Casualty
III. Maximization of Exemption Allowances
A. Does Client Participate In/Have Retirement Plans?
1. Determine Exempt Status
2. State Jurisdiction
B. Is Homestead Exemption Available?
1. Ascertain How Title is Held
2. Consider Effects (Tax and Non-Tax) of Changing Title
C. Determine Joint Ownership/Community Property Ownership and Consideration of Change of Title
IV. Review Estate Plan and Nature of Asset Holdings with View Towards Creditor Protection
A. Does Client Expect Large Inheritance?
• Ascertain Whether Outright or in Trust
B. Do Wills and Trusts Provide for Outright Distributions to Beneficiaries?
• Consider Amending to Retain Assets in Trust
C. Business Activities
1. What Form of Entity is Utilized?
( ) LLC ( ) Corp () Sole Proprietorship
( ) S Corp. () L.P. ( ) Professional Corporation (P.C.)
2. Is Client a General Partner?
3. Has Client Provided Guarantees?
4. Consider Reorganizing Holdings and Segregating Assets with Liability Potential
5. Tiered LLC
6. Section 501(a)(9) – Supporting Org.
7. State/Foreign Jurisdiction
V. Prepare Solvency Analysis
VI. Consider and Discuss the Following Techniques to Protect Wealth
A. Domestic Trusts
1. QPRT (Qualified Personal Residence Trust)
2. CRT (Charitable Remainder Trust)
3. QTIP (Qualified Terminable Interest Property)
4. Discretionary
5. Power of Appointment
6. GST (Generation Skipping Trust)
7. GRIT, GRAT (Grantor Retained Income Trust, Grantor Retained Annuity Trust)
B. Foreign Trusts/US Trusts
C. Foreign Annuities/US Annuities
D. Foreign Life Insurance/US Life Insurance
E. Limited Liability Entities