Asset Protection refers to the process of organizing your assets and financial affairs in advance to guard or insulate at least some of them against various risks of loss which they would otherwise be subject to, such as aggressive creditors or lawsuits. Asset protection planning may be used to protect nearly every type of asset, although the specific techniques employed may vary depending on the particular asset or assets you seek to protect.

While asset protection planning may be appealing to anyone who recognizes the value of protection from unknown future risks in the uncertain world in which we live, in our experience this is especially true for people in certain specific categories. This would include those in occupations with an unusually high risk of lawsuits or litigation, business owners, physicians and other professionals, and people who have high income or high net worth, or who are otherwise “high profile.”

The ultimate goal of asset protection is not to somehow prevent creditors from making claims, but rather to take reasonable steps to ensure that if you do have to face such a claim you will be left meaningfully better off than if you had failed to implement the planning. While it is not possible for anyone to absolutely guarantee that protected assets could never be reached by any creditor under any circumstances, the goal of being at least meaningfully better positioned than without planning can almost always be achieved, and having substantially better protection or even enjoying virtually complete protection from a given claim is not unusual.

While some asset protection techniques have only become available relatively recently and may not be well known to everyone, in general they have become firmly established and relatively well accepted legally. In that regard, it should be noted that safeguards do exist to prevent asset protection techniques from being used to defraud creditors. One of the important implications of this observation is that in order to be effective, virtually all asset protection strategies must be completed in advance as a matter of general principle (i.e., prior to the point where any creditor has a specific or foreseeable claim).

There is no one asset protection planning approach that universally protects all assets, so an asset protection plan must necessarily involve a mix of the various tools and techniques which are available. A plan must also be carefully designed to coordinate with your other goals and objectives and be “user-friendly” in order to be effective and durable. There are many ways in which mistakes in the asset protection planning process can be made, so this is definitely an area in which to be very careful.

This area of planning continues to expand, and there is a greater range of effective tools for asset protection available now than ever before. If asset protection is an important concern for you, we invite you to schedule a consultation so that we can explain the options available to you and how our planning solutions can help you protect what you have worked hard to accumulate.