Family Businesses Family limited partnerships. A family limited partnership allows senior family members to transfer a significant portion of a family business or property to younger family members without giving up control, while reducing estate taxes and providing limited protection against creditors. The rules that apply to estate freezes are very complex, so careful planning is critical. Qualified retirement plans. Qualified retirement plan accounts and benefits are generally exempt from the claims of creditors.
IRAs offer some, but less, protection.
Non qualified deferred compensation. This is simply an agreement by the company to pay for an employee's services at a future date. If properly structured, these funds are not taxed until they are received and may be protested from creditors. Life Insurance Trusts A properly structured irrevocable life insurance trust can be used to protect the policy and proceeds against creditor claims and remove the proceeds from the insured's taxable estate. APTs are complex and expensive, and the grantor must be willing to place the trust assets beyond his or her reach for a significant amount of time.