ASSET PROTECTION PLANNING
What is Asset Protection Planning?
Asset protection planning involves protecting yourself, your business, and your hard-earned assets from loss due to lawsuits, creditors or bankruptcies. This type of legal planning is especially important for professionals and business owners whose personal assets could be at risk due the nature of their work. But asset protection can also be quite effective for regular folks as well.
Why Asset Protection?
These days, anyone can get sued. Lawsuits can result from car accidents, credit card debt, bank foreclosures, unhappy customers, and many other things. If someone wins a judgment against you, you or your family could be financially devastated or even go bankrupt trying to pay it off.
In addition, families or individuals concerned about the high cost of long-term medical care and may wish to protect assets in the event that a family member needs to qualify for governmental assistance (such as Medicaid) in the future. With the proper advance planning, a family may be able to preserve significant assets for future generations, protect those assets from a future estate recovery claim by the State, and still qualify a loved one for Medicaid benefits when it is needed.
We can help you create a legal barrier between creditors and your assets. Some of the most common asset protection techniques we use include maximizing contributions to IRAs, moving funds to an irrevocable trust, retitling assets, or using limited liability companies or other business entities to separate personal and business assets and liabilities.
When is the Best Time for Asset Protection Planning?
One key thing to keep in mind about asset protection planning is that it only works if you act before you are sued or have notice of a potential creditor’s claim. By the time you’ve been sued or learn of a creditor’s potential claim, it’s already too late to transfer your assets out of creditors’ reach – such transfers are likely to be reversed by a court and may even be found to be fraudulent. To avoid running afoul of the law and to actually be effective, it is essential to put your asset protection plan into place well before it is “needed.”