The basic of asset protection planning involve rearranging the ownership of assets to make them out of reach of potential creditors as a means for preparing for the possibility of future lawsuits. In many ways, asset protection planning can act as a type of supplementary insurance. For example, the amount of a claim may be over the insurance policy limits, or there may be some other loophole that nullifies existing coverage.
Asset protection planning is typically utilized to safeguard assets that would otherwise be at risk, or to provide extra protection in the event that insurance thought to provide adequate coverage does not. For the most part, the more thorough and complex the asset protection plan, the better the protection, but this is not always the case, as extremely sophisticated plans typically carry more restrictions and cost more.
The simplest type of asset protection planning involves looking at which property you have is exempt and therefore unreachable by creditors. For example, many states place furniture, clothing, jewelry and tools of a business or trade as exempt. Each state differs so be sure to check what the laws are in your area regarding exempt and non-exempt property. Some states have a dollar amount limit for exempt assets.
In some states a home or land can be considered exempt. Transferring the ownership of assets to a spouse or family member can sometimes be the simplest type of asset protection planning, protecting property during your lifetime and from the tax collector at death.
Remember, when in doubt, good advice can stave off big problems down the road. Contact us for reliable asset protection planning and know that your hard earned assets are safeguarded from potential creditors. A knowledgeable asset protection lawyer can provide peace of mind and a solid plan that will protect your interests for years to come.
- Bill Nye the Science Guy on Wearing Masks in Public - July 11, 2020
- Low-Interest Loans: An Estate Planning Technique - June 23, 2020
- Irrevocable Medicaid Trusts - June 16, 2020
Leave a Reply