Thinking of Putting an Asset in Another Name? Be Aware of These Potential Pitfalls.
Aug. 17, 2018
I have many clients that put the ownership of their assets in other names.
The usual scenarios (and related challenges) include:
Scenario #1: Putting their assets in a trust thinking that they will avoid tax related responsibilities
Related Challenge: This often results in difficulties regarding reasserting their ownership of these assets in the future.
Scenario #2: Putting their assets in joint accounts thinking that it will facilitate convenience
Related Challenge: This tends to result in a situation where their assets have been snatched.
Scenario #3: Putting their assets in their spouses name in an effort to avoid creditors.
Related Challenge: This can lead to difficulties obtaining future loans and pursuing other business opportunities wherein it is necessary for the client to show assets.
Scillieri Best Practice Alert
While it sometimes serves a beneficial purpose to remove an asset from the owner’s name, it often creates greater problems in the future than it resolves. Make the time to explore your options and potential consequences before deciding how to proceed.