What is asset protection planning?
Asset protection planning is the adoption of advance planning techniques which place one’s assets beyond the reach of future potential creditors. In our practice, it does not involve hiding assets, nor is it based upon secret agreements or fraudulent transfers. It is based upon proven sophisticated combinations of business and estate planning techniques.
Asset protection planning involves figuring out and applying a lawful series of techniques that protect your assets from claims of future creditors. There are techniques that are designed to deter potential creditors from going after you, and frustrate them if they do, generally by making it difficult or impossible for future creditors to grab hold of your assets or collect judgments against you. In cases where significant sums are involved, asset protection planning often includes setting up a series of trusts, partnerships and/or off-shore entities to hold legal title to your assets. A future creditor who recognizes how difficult it would be to collect on any judgment it may win, might decide it makes little sense to pursue a claim, or be willing to settle for pennies on the dollar. There is a very sharp dividing line between “legal” asset protection planning on the one hand, and actions to defraud creditors, which are criminal, on the other. For that reason it is essential to have a
Asset protection planning involves figuring out and applying a lawful series of techniques that protect your assets from claims of future creditors. The techniques are designed to deter potential creditors from going after you, and frustrate them if they do, generally by making it difficult or impossible for future creditors to grab hold of your assets or collect judgments against you. In cases where significant sums are involved, asset protection planning often includes setting up a series of trusts, partnerships and/or off-shore entities to hold legal title to your assets. A future creditor who recognizes how difficult it would be to collect on any judgment it may win, might decide it makes little sense to pursue a claim, or be willing to settle for pennies on the dollar. There is a very sharp dividing line between “legal” asset protection planning on the one hand, and actions to defraud creditors, which are criminal, on the other. For that reason it is essential to have an attorney
Asset protection planning is the method of preparing for the possibility of future lawsuits by rearranging the ownership of assets so that they are beyond the reach of potential creditors. It can act as a form of supplementary insurance in an overall strategy to protect you from the risks associated with businesses and professions; however, insurance policies have limits and exclusions. • Policies may not pay a claim based upon the commission of an intentional act or one resulting in punitive damages. • The amount of the claim may exceed the policy limits. Asset protection planning is used to protect assets that would otherwise be at risk. Asset protection planning can be done to differing degrees. In general, the more complex the planning, the more effective the protection. However, complex plans generally cost more and contain more restrictions. DO YOU NEED ASSET PROTECTION PLANNING? If you have enough assets to require estate planning to avoid death taxes, then you probably have eno
