Call Us Now
Email Us Now
What Exactly Is an Asset Protection Plan?
You’ve worked hard to build your life, but unfortunately, there are always risks inherent to having money, property, and other assets. Safeguarding these is essential if you want to hang onto what you’ve earned. An asset protection plan is a strategy or set of measures that can accomplish this. Unfortunately, many people don’t recognize the importance of such actions. That’s why it’s critical to understand the benefits of an asset protection plan.
When you create this plan, it can look very different from what another person creates. However, the underlying goal is always to protect assets from potential risks — such as lawsuits, taxation, creditors, high healthcare costs, bankruptcy, and more. A variety of tools and strategies can be utilized — both financial and legal — to achieve this goal. And regardless of the strategies you use, the benefits of asset protection plans will be apparent.
What Are the Benefits of Asset Protection Plans?
Protecting your assets can be a tedious process — particularly if you choose to forego legal assistance. As such, many people wonder whether such strategies are worth the effort. The answer to this question is a resounding “yes,” and here are just a few reasons why:
Asset Preservation
Assets are always at risk due to issues such as creditors, lawsuits, and bankruptcy. Asset protection strategies offer financial stability and security.
Safeguard From Rising Health Costs
As we get older, the costs of staying healthy go up. Unfortunately, many people save their whole lives only to lose their money to medical expenses. Asset protection strategies can help a person meet Medicaid eligibility so their savings aren’t eaten up.
Business Continuity
These strategies can also assist business owners by helping them maintain operations even when they’re facing legal challenges.
Risk Mitigation
Asset protection plans greatly reduce the risk of losing valuable assets — including savings, real estate, business interests, and more.
Estate Planning
Asset protection strategies are often utilized as part of estate planning. This can safeguard your assets to ensure your heirs receive what they deserve.
Creditor Deterrence
The right financial and legal strategies could potentially deter creditors from pursuing legal action — often realizing that their efforts will not be worth any potential payoff.
Peace of Mind
Whether you’re working with an estate planning lawyer or any other legal professional, the peace of mind offered by these strategies is one of the best benefits of asset protection planning. Being able to live without worrying about these issues is priceless.
What Strategies Are Used for Asset Protection?
Securing the benefits of an asset protection plan can be simple with the right legal help. However, it’s important to understand your options — along with the strategies that are best in your unique circumstances. Remember: not all of these financial and legal tools will be appropriate. It’s necessary to review your unique needs and long-term goals.
Once this review is complete, the following strategies are available:
- Retirement accounts
- Insurance plans
- Asset protection trusts
- Medicaid trusts
- Estate planning and gifting
- Family Limited Partnerships
- Creation of legal entities
- Asset segregation
- Beneficiary designation
- Homestead exemptions
- Prenuptial and postnuptial agreements
- Irrevocable Life Insurance Trusts
- Equity stripping
- Asset encumbrance
These strategies cover an extensive array of financial and legal situations. However, this is not an exhaustive list. There are many other asset protection strategies that are either lesser known or simply don’t get used often. Speaking with an experienced asset protection attorney may be your best chance to learn if any of these approaches are right for you.
Fortunately, there are law firms that offer free consultations. This means you can learn more about your situation with no risk.
Do You Need an Attorney?
When a person is researching the benefits of asset protection plans, they’ll eventually question whether they need legal help. Many online resources provide in-depth information on strategies that can be used, and there’s an increasing number of do-it-yourself estate planning websites available to use. However, using such resources can lead to major problems — particularly for asset protection planning.
Put simply, there’s no room for mistakes in this area of law. If an error occurs when someone sets up a trust, insurance policy, or other protection strategy, it likely won’t be discovered until it’s too late. For instance, a person can’t just call an insurer after a flood destroys their home and say, “I honestly thought my policy covered this. Can you apply it retroactively?” Similar issues can arise with other strategies as well.
If you want the benefits of an asset protection plan, you need to make sure that it’s done correctly. An experienced attorney can assist in this goal. At Peak Legal Group, our law firm is ready to help. Contact us today at (610) 989-7064 to schedule your free consultation.
