| 1EO102 288615 5/14 | 1EO102 288615 8/14

Not FDIC Insured

May Lose Value

No Bank Guarantee

| 2EO102 288615 8/14

Asset protection:Preserving your net worth

• We protect our homes, cars, valuable possessions —even household appliances

• What about our wealth?

| 3EO102 288615 8/14

Lawsuits target “deep pockets”

“How a jury decided that a coffee spill was worth $2.9 million”

Wall Street Journal, September 1994

“Mall sued over squirrel attack”Chicago Sun Times, August 2006

“N.J. woman hit with ball sues Little League player”USA Today, June 2012

| 4EO102 288615 8/14

Are your assets at risk?• Do you own a home?• Are you in a high-risk profession? • Do you own a business?• Does your business have employees?• Do you own rental property or real estate investments?• Do you have significant personal savings or other valuable

assets?• Do you drive a car often?• Do teenage drivers live with you?• Do you have pets?

| 5EO102 288615 8/14

A critical part of a financial plan

Investments

Insurance

Funding education

Planning for income in

retirement

Minimizing taxes

Saving for retirement

Comprehensivefinancial plan

Asset protection

Estate planning

| 6EO102 288615 8/14

A two-part plan to protectyour assets

1Minimize yourrisks now

2Put a protection plan in place — before something happens

| 7EO102 288615 8/14

What asset protection is NOT

• An excuse or vehicle for evading taxes• A method for hiding assets• A way to defraud creditors

Source: Asset Protection Planning Guide: A State-of-the-Art Approach to Integrated Estate Planning, Barry S. Engel, David L. Lockwood, and Marc Merric.

| 8EO102 288615 8/14

Build your protection plan

This material is for informational purposes only. It should not be considered legal advice.You should consult with an attorney to determine what may be best for your individual needs

Basic components Complex techniques

InsuranceIncorporating your business

Titling assetsInsulating “hot” assets such as real estate

Homestead exemptions Equipment leasing andmultiple LLCs

Protecting retirement and college savings

Using trusts to protectyour assets

| 9EO102 288615 8/14

Start with the basics • Identify and correct property risks• Review your insurance coverage• Purchase umbrella liability coverage• Apply for a homestead exemption • Be careful when titling assets• Identify and correct any potential risks associated with

property and real estate• Maintain positive personal and professional

relationships

| 10EO102 288615 8/14

Are your retirement savings protected?Type of retirement account File for bankruptcy? No bankruptcy

ERISA plans:401(k), pension, profit sharing, ESOP

Full protection Full protection

Rollover IRA, SEP IRA, SIMPLE IRA, most 403(b) plans, Individual 401(k)

Full protection

Not protected at federal level, may receive protections at state level

Traditional and Roth IRA

Protected up to $1 million

Not protected at federal level, may receive protections at state level

| 11EO102 288615 8/14

How college savingsare protected

Point of contribution 1 year 720 days

Made less than a year before filing: NOT protected from creditors

After 1 year, $5,000 is protected

Made more than 720 days before filing: 100% protected

Federal protection in the event of Chapter 7 bankruptcy filing

| 12EO102 288615 8/14

Is your business putting personal assets at risk?

Business owners may be at risk of legal claimsby patients, customers, or employees

Without a formal business structure,your personal assets may be at risk

Select a method of ownership for your business to make it difficult — or expensive — for someone to access your assets

| 13EO102 288615 8/14

Structuring your business

Business ownership Benefits Considerations

Corporation (C corp or S corp)

• Business owner does not bear personal liability for debts of the corporation

• May be more complex to establish and maintain

• Adverse legal judgment could result in plaintiff receiving ownership shares

LLC or LLP • Easy to establish and maintain

• Potentially better liability protection than corporations; creditor attachment may be limited to distributions, not shares of ownership

• Some states may allow creditors to attachownership interest of LLCor LLP

| 14EO102 288615 8/14

Insulate “hot” real estate assets

Liability for one property won’t affect other properties or personal assets

Separate LLCs can insulate risky assets from personal assets

Personal assetsSummerrental

cottage• Primary residence • Bank accounts• Investments• Personal belongings

LLC #1

Apartmentbuilding

LLC #2

Commercialreal estate

LLC #3

| 15EO102 288615 8/14

Example: Using leasing and multiple LLCs to protect assets

The medical practice leases office space and equipment from the LLCs

Equity in these assets is NOT contained in the medical practice, where it could beat risk

LLC#1Equipment

Medicalpractice

LLC#2Real estate

| 16EO102 288615 8/14

Using trusts to protectyour assetsType 0f trust Asset protection considerationsIrrevocable trusts • Typically prevent trustee from making distributions

to satisfy creditors of the trust beneficiary

Offshore orforeign trusts

• Trustee is not subject to jurisdiction of U.S. laws and courts

• Creditors may find these assets more difficult/expensive to target

• Certain court cases have exposed limitations

Domestic asset protection trusts

• Trustee and beneficiary are same person• Designed specifically to protect assets from

creditors• Relatively new, available in a few states; lack of

existing case law to provide precedent of their effectiveness

| 17EO102 288615 8/14

Your action plan• Meet with your financial advisor• Review current assets and determine your net

worth• Take care of basics, such as insurance

coverage• Identify and minimize any prevalent risks• Consult with an attorney

| 19EO102 288615 5/14 | 19EO102 288615 8/14