Asset Protection Planning
Asset Protection Planning is a strategic, preemptive preparation to prevent creditors from obtaining assets in the event of a civil judgment. It does not mean that a person ignores their obligations to debt. It means that a person will control their obligations to debt.
Wealth Protection Plans are all encompassing whereas protecting your home entails protecting a single asset. Though it is good to protect a single asset, one must keep in mind “flow through” liability. Liability can be passed or transferred just as proceeds can be passed and transferred.
Personal liability is different from business liability, but it is possible to mix the two. However, it is also possible to compartmentalize or separate liabilities, and this is a main objective of asset protection plans. A skilled planner will understand the options available for specific circumstances. Often times it is beneficial to go offshore which may increase security and privacy, provide tax incentives, a greater rate of return on investments and asset protection. All of these considerations are built into an asset protection plan.
Asset Protection Plans take all of a person's assets into consideration: stocks, bonds, annuities, insurance, life insurance, property, inheritance, precious gems, artwork, antiques, income, bank accounts and businesses (this is not a totally inclusive list).
Plans should be crafted when the financial seas are calm. It is important to protect assets before a creditor attack and not during the threat. It is against the law to fraudulently convey or transfer assets to avoid a judgment award. This can be a criminal charge, so we recommend that a plan is strategically developed and crafted when the financial seas are calm.
Every plan is for an individual situation and therefore a practitioner must have vast knowledge of the options and the laws. A good practitioner may or may not be a lawyer. Many lawyers do not specialize in the integral parts of a wealth preservation plan. It generally takes a combination of advisors, both legal and non-legal to accomplish the goals. There are attorneys who do it all and their specialty area of practice may be Wills, Estates and Trusts or Asset Protection . The planner must have all options available, including offshore options and not just life insurance or business incorporation. These along do not constitute an asset protection plan .
TrustMakers is ready to discuss your liabilities and options for your asset protection planning. Call us for a 20-minute consultation .
ASSET PROTECTION PLANNING
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