Reasons to Implement Asset Protection

Reasons for Asset Protection

A question frequently asked by many people is "Why should I impliment Asset Protection?" Quite simply, there is currently a litigation explosion in our society forcing professionals, small business owners and the average homeowner to focus on how they can protect their savings, investments and accumulated assets that have become attractive targets for unscrupulous attorneys.

Presently the U.S. legal system seems to be against the defendant and in favor of the plaintiff. Worse, there seem to be many judges in the U.S. who aren't competent to handle the cases coming to them. And, in the past decade, judges have issued judgments that are both unjust and unfair.

Recent surveys have determined that the average person will be sued five times in their lifetime. Even sadder is the fact that he or she face the prospect of being on the receiving end of a ruinous judgment. Therefore, failing to plan for that contingency through asset protection could result in the loss of a lifetime's accumulated wealth. And, once a lawsuit has been filed, the law looks darkly upon moving assets. So, it is always better to move your assets while the waters are still calm.

Another question that is often asked is how are creditors and attorneys able to find my assets. It's astonishing how easily this can be done without asset protection. What lawyers do is hire one of the firms that specializes in locating assets. These firms are able to locate bank accounts, real estate, brokerage accounts, auto, and businesses in an individual's name. In fact, a contingency fee attorney might do an asset search before initiating a lawsuit to ensure the defendant has something of value before the attorney spends his time and money. The fact of the matter is that there is little about your personal and financial well being that cannot be found. The good news is that, if the assets are not in your name and are listed in the name of a corporation, trust or partnership, then finding them becomes very difficult and expensive for the plaintiff's lawyer.

So, what should you do to minimize the chances of losing your assets? You begin by becoming a smaller target. To become a smaller target, you have to start by shrinking the size of your estate. By implementing asset protection, you'll wind up owning nothing but controlling everything. This is done through a combination of domestic and foreign structures. You do not want to give up control, but give up ownership in such a way that a plaintiff will give up and look for someone else to sue.

You should never do what is known as the "poor man's asset protection". This involves transferring your assets to your spouse, brother, sister, mother, or friend. This is a bad idea, because it is transparent to an attorney and it will result in serious IRS tax problems.

Is doing any of the above is legal? The answer is a resounding "Yes!" The wealthy have practiced asset protection for years by using these very tools and strategies we have discussed. They are legal, effective and can give you the peace of mind you desire