Like most things in life, waiting until it’s too late to protect your assets will rarely work out in your favor. Sure, there are groups of people who are more likely to get sued than others—doctors, realtors, etc. These people are more likely to be prepared for the worst case scenario. But everyday, average people like you and I come into tough times, too. If that happens—and we hope it doesn’t—you’ll be glad you invested in asset protection planning.
Asset protection planning is recommended for anyone who has something valuable to protect from potential creditors. An estate planning attorney can help individuals protect their assets. Like many other areas of estate planning law, asset protection planning is highly nuanced. While the “rules” are different for every situation, here are 7 to follow if you’re ready to start protecting the assets you’ve worked so hard to accrue.
1. Be proactive. Once a claim or liability arises, there isn’t a whole lot you can do to protect your assets. Furthermore, engaging in asset protection planning after a claim arises can not only compromise your position, but it can also compromise the position of whoever assisted with your fraudulent transfer.
2. You still need insurance. An asset protection plan should supplement liability or professional insurance…not replace it. If you get sued, your insurance company will cover the cost of defense and settlement. If you lose, your asset protection plan kicks into play.
3. Keep your personal assets personal. Moving your money into a business entity is risky. Put personal assets in a trust where they belong—they are easier to protect, especially when the trust is drafted by a qualified estate planning attorney.
4. You’re going to have to give up some control. If you have too much control over your protected assets, your plan could be disregarded on the basis of alter ego.
6. Bankruptcy is not a cushy option. Once upon a time, bankruptcy could leave a debtor with enough assets to hold his head high. Not so much today. Bankruptcy laws have changed, and today, debtors who file bankruptcy should be prepared to be left with close to nothing.
7. You need to understand your plan. If you can’t explain it, it won’t hold up in court. End of story.
8. Everything comes out in the wash. Don’t try to hide assets, and don’t build your plan on a foundation of secrets that must be kept in order for it to hold up. Work with a trusted estate planning attorney who will help protect your assets in an honest, open and legal way.
One final and very important consideration for those considering asset protection planning is the fact that an asset protection plan and an estate plan can end up contradicting each other. Hiring a qualified attorney can help you protect your assets and plan your estate, without one putting the other at risk.
Interested in Protecting Your Assets?
Request a free Asset Risk Analysis from the Deliberato Law Center and allow one of our qualified professionals guide you on the first steps towards protecting your assets. Whatever your assets are, you worked hard for them…and you should protect them from the uncertainties of the future. Complete the brief form below to request your free Asset Risk Analysis today.