Florida law provides generous asset protection from many creditors. However, some types of creditors – so-called “super creditors” are not always subject to the same asset protection laws and rules as other creditors. Therefore, as you go through the asset protection planning process, you should understand the challenges and limitations that these super creditors pose. A Florida asset protection lawyer at Kramer Green can fully assess your situation and help you determine the asset protection plan that will be most effective for you.
Federal Government Agencies
Federal government agencies, such as the Internal Revenue Service (IRS), Department of Justice, and Securities & Exchange Commission, are not subject to the statutory exemptions that are effective against most creditors under state law. Federal debt collection regulations and procedures allow these agencies to supersede state debt collection laws.
For instance, if personal property is exempt from most creditors because a married couple holds it as tenants by the entireties, the IRS still can seize half of the property to satisfy a federal tax debt owned by one spouse. Similarly, although Florida law exempts the salary of the head of household from garnishment, the IRS can still garnish that salary. The IRS has a lien on all taxpayer property to secure payment of federal taxes, regardless of any state law exemptions.
Some individuals think that moving assets to offshore accounts to avoid attachment by federal government agencies is a valid means of asset protection. Although you can establish offshore accounts with after-tax money, attempting to evade taxes by moving assets into offshore accounts is illegal tax evasion and not a legal asset protection method.
Current / Former Spouses and Children
Debtors who fail to pay spousal support or child support as ordered in family court can be subject to civil contempt of court. Therefore, individuals may have to use assets that otherwise would be exempt under state law to pay these debts or face unwanted consequences, including jail time. As a result, traditional asset protection techniques are likely ineffective in preventing payment of these obligations.
Exceptions to Homestead Protection
Some creditors fall within exceptions to the homestead protection, which makes them super creditors, at least concerning a debtor’s homestead. Creditors with claims that overcome homestead protection include secured creditors such as mortgage companies and banks that hold mortgage loans secured by the real estate. Due to homeowners’ association assessments and labor and materials used to improve the property, liens on the real estate also take precedence over homestead protection. In other words, if a debtor does not satisfy these debts, the creditor can foreclose on the property, regardless of Florida’s robust homestead protection.
Allow Us to Assist You with Super Creditors & Your Asset Protection Needs Today
An asset protection attorney at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. can provide you with the tools available to protect your assets to the greatest extent possible. We know how to provide you with the maximum asset protection available to safeguard the wealth that you have worked to accumulate over time. Call us today at (954) 966-2112 or contact us online to set up a time to discuss your legal issues with our experienced asset protection lawyers.