Asset Protection Planning

We live in a litigious society.  Many people have very real fears about having their assets taken by creditors.  Doctors and others are engaged in high-risk professions. Landlords face lawsuits from tenants or property visitors. Driving an automobile can give rise to significant liability. In today’s legal environment, even meritless lawsuits have risk because no one can guaranty how a judge or jury will decide a case.

To mitigate the risk of losing what has taken a lifetime to accumulate, many people engage in some form of asset protection planning.  Asset protection planning is the process of organizing one's assets and affairs in advance to guard against risks to which those assets would otherwise be subject.  Asset protection is not about hiding assets or defrauding creditors.  A hidden asset can be found, but a protected asset is safe.

A properly structured asset protection plan should seek to accomplish one or more of the following goals:

  • Deter Litigation
  • Provide Incentive for Early and/or Cheap Settlement of a Lawsuit
  • Level the Litigation Playing Field
  • Enhance One's Bargaining Position

Asset protection planning can take on many forms or planning techniques, depending on an individual's particular situation and tolerance to risk.  Before a person implements an asset protection plan, it should be reviewed to make sure it is proper for that person and is consistent with his or her overall financial and estate planning goals and objectives.

Among the various asset protection tools and techniques are the following:

  • Liability Insurance
  • Miscellaneous State Exemptions (Including Homestead Exemptions)
  • Gifting, Dividing and Transferring Assets
  • Corporations, Limited Liability Companies and Limited Partnerships
  • Irrevocable and Asset Protection Trusts
  • Foreign Situs Trusts

For more information about asset protection planning, please contact us for a free initial consultation or ask for our brochure titled "Understanding the Basics of Asset Protection Planning."