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Asset protection plans can be looked at as a layer of insurance. If you lose your house and everything within to a fire, insurance will make you whole again. To return you to a state of economic wealth that you were in before the fire. An asset protection plan exists as a shield to protect you and your assets that could be susceptible to legal claims by creditors, an ex-spouse, or a judgment.
You may be curious about asset protection plans and if you need one. If you are thinking about it, it probably means you are already at a point where you could benefit from an asset protection plan.
Different Types of Asset Protection Plans
There are a multitude of asset protections, ranging from insurance to off-shore accounts. Here are just a few of the types of plans you can implement to keep your wealth protected:
- Asset protection trusts
- LLCs, also known as a Limited Liability Company
- Land trusts
- Title holding trusts
- Foreign corporations
Benefits of an Asset Protection Plan
Wealthy individuals primarily use asset protection plans, but anyone who has substantial wealth, increasing wealth, revolving credit card debt, a mortgage, or other loan that is in default. Remember, asset protection plans are there to protect your wealth and assets from anyone or any organization that may be looking to claim any of your property.
Keep Your Wealth Private
Asset protection planning can implement tools to keep your assets and wealth private. This, in turn, can deter lawsuits by keeping a portion of your wealth out of public view. If you are not seen as a high-value target, it is less likely someone will see value in filing a claim against you, frivolous or otherwise.
More Easily Consign Assets
Using an asset protection plan can help ensure the transfer of wealth from one person to another, say, a cash transfer.
Reduce Loss
Using an asset protection plan as a small or large business owner can help minimize any loss in the case of underperformance or failure to meet expectations. If you are in a hard place, lenders may consider a lawsuit to recover their investment.
Minimize Loss From Conflict
If you are in a partnership, keeping your individual assets protected by an asset protection plan can ensure you keep your wealth in case your accomplice ends up in hot water.
Creating Independent Business Entities
If you own rental properties, you will want to create an asset protection plan for each property. This affords you additional layers of protection. If a tenant decides to sue you, and they happen to win the lawsuit, this will limit the portion of your assets that is vulnerable to judgment and collections.
This is similarly true in non-rental cases. It can create a divider between businesses and leave them less exposed to claims.
Stronger Jurisdictions for Stronger Protections
Using asset protection plans allows you to set the plan up in a more favorable jurisdiction to you and offers the protections you need precisely—for instance, setting up your accounts in a foreign country with more favorable laws.
This may deter legal opponents from pursuing you, your assets, and your accumulated wealth by making it harder to determine your actual wealth. Proper planning protects you, your assets, real estate, savings, and even future wealth.
A determined attorney and committed judge can penetrate almost any domestic asset protection with enough time and resources. That is why it is essential to diversify your protections using foreign trusts.
How to Go About Establishing Asset Protection Plans
An important first step is hiring an attorney to help establish asset protection planning. However, it is important to remember one major thing when looking for a lawyer to assist you along the way: where an attorney is usually there to defend you from a lawsuit, an asset protection attorney is there to protect you from one. An asset protection plan is proactive, and a defense attorney is reactive.
The lawyers of Peak Legal Group are available to help you with this integral step in protecting your accumulated wealth, as well as your future income. Contact the offices of Peak Legal Group today to schedule your commitment-free consultation; call today at (610) 989-7064.
