What is Asset Protection?
Asset protection is the proactive planning to protect your assets from future creditors or judgments, within the confines of applicable law.
A well-designed asset protection plan builds a barrier around the client’s estate and protects family wealth from external creditor attack and frivolous lawsuits. Anyone who is concerned about their contractual liabilities or being named as a defendant in a civil dispute needs an asset protection plan. Ideally, an asset protection plan is implemented when the client has no existing or foreseeable claims.
The process of asset protection involves transferring assets from an unprotected form of ownership to a protected form of ownership. The unprotected form generally applies to property held directly in an individual’s name of even the name of a revocable trust. The protected form can be one of many asset protection vehicles such as limited liability partnerships, limited liability companies, domestic irrevocable trusts, and other such entities. Therefore, asset protection plans are often formulated in conjunction with a client’s estate plan.