Asset Protection Planning
is proactive legal action that protects your assets from threats such as creditors, divorce, lawsuits and judgments. Call now to let our attorneys help you.
Asset protection is not a one-time thing. It is something that you should review every six months or so, as your situation changes. Once we graduate from college, our main goal is to earn money. Gaining money and assets becomes our goal throughout life. We need money to pay bills and buy the things we need, such as food and shelter. As we grow our bank accounts, we may also acquire vehicles, houses and other assets. So does the need to inspect our financial foundation: our asset protection plan.
Working 40-hour weeks and acquiring money and assets is not the only thing we need to be concerned with. We also need to think about how to protect these assets in the event of a lawsuit…and keeping it up to date as your financial picture evolves.
Things change. You buy a house, sell it and buy another. You change cars, change banks, perhaps, and your business and investment portfolio grows. You start an additional business. You buy one rental property, then another. As you do this, the legal tools that you need to protect yourself from lawsuits constantly change and grow. Asset protection is not a set it and forget it phenomenon. Each time you buy a rental property, put it into another LLC. That way if one property experiences liability, the lawsuit won’t take your entire real estate portfolio.
You may be wondering why you need to protect your assets in the first place. It’s not like anyone is just suddenly going to take everything from you, right? Wrong! Just one legal action can allow an injured party to possess everything you own – not just your business assets, but your home, vehicles, expensive collections and everything else you cherish. And as you grow, so should your asset protection strategy.
You may think that nobody would sue you. But chances are, if you own a business or appear wealthy, someone will eventually try to sue you. The average person in the US experience seven lawsuits in his or her lifetime. In this litigious world, you become a target for frivolous lawsuits – even if you haven’t actually done anything illegal.
If you’re a successful business owner or a millionaire through some other means – and want to stay that way – you need to protect yourself. That involves using asset protection, which we’ll discuss later. First, here’s a look at some of the threats you may encounter.
Successful business owners are often targets for lawsuits. Due to the numerous insurance and legal issues involved in running a business, here are some types of professional liability that you might encounter, and to be aware of as your needs change:
The following types of lawsuits can result in seizure of your personal assets:
As your business grows, so does your exposure to the above risks.
No matter who you are or what you own, you can benefit from one or more of these forms of asset protection:
…Sooner Rather Than Later
If you’re already being sued, it’s not too late to protect your assets. The courts may assume you’re using an asset protection tool to avoid losing your assets, and this considered a fraudulent transfer. But this is a civil matter, not a criminal one. So it’s better to try than sit back and be a victim.
You don’t want to draw unavoidable attention to yourself in a way that makes you a lawsuit target. Neither is it ideal to make last-minute transfers that leave you vulnerable to court scrutiny. So, somebody will sue you. The best time to choose a form of asset protection is now – when the threat of a lawsuit is not imminent. It’s better to be safe than sorry.
Without protection, you could lose your business, home, money, vehicles – everything you own. A situation like this also a deeply emotional impact. As such, you could end up losing your family over a stressful legal issue gone wrong.
There are many options when it comes to protecting your assets. There are asset protection trusts. There are foundations. In fact, we have an article entitled, Trust or Foundation, Which is Better? There are domestic and offshore LLCs to protect assets from lawsuits. Use the numbers above to speak with an expert or fill out a free consultation form. Research your options.
Each situation is unique. Not everyone has the same types and number of assets. In addition, each state has its own set of rules.
There is not one method of asset protection that is one-size-fits-all. You will likely need multiple methods of asset protection to accomplish your goals and your needs will change as your finances change. Get a hold of an asset protection consultant to determine which methods of asset protection will help you preserve your assets now and for the rest of your life. You’ll have peace of mind today, tomorrow and decades down the road.
Linsay Thomas, Technical Editor, contributing author