Asset protection (Trusts)

Asset protection, technically, is the debtor’s side of creditor-debtor law. While creditors are concerned about the strategies and techniques of collection, debtors are interested in the strategies and techniques for protecting their most valuable assets from potential  plaintiff.

The main goal of all asset protection planning is to insulate assets from claims of creditors without concealment or tax evasion.

Assets that are shielded from creditors by law are few (common examples include some home equity, certain retirement plans and interests in LLCs and limited partnerships but even these are not always unreachable). Assets that are almost always unreachable are those to which one does not hold legal title. In many cases it is possible to vest legal title to personal assets in a trust, an agent or a nominee, while retaining all the control of the assets.

Thus if you have something to protect then the issue of asset protection should at least cross your mind.

And if crossed your mind it is better to start planning before a claim or possible claim arises.  This is just to avoid asset protection deal to be treated as “fraudulent transfer” with all negative personal liabilities for the debtor.

Also, it is highly recommended to apply  liability and professional insurance within your asset protection scheme.  Insurance supplements asset protection planning, since it can help a debtor survive a claim a fraudulent transfer claim as the insurance company pays to defend it and pays to settle it.

It is considered that Personal Assets are for Trusts; Business Assets are for Business Entities

Asset protection planning goal is to reach a balance between giving the client sufficient control so that the assets do not disappear and remain reachable, but at the same time not so much control that a creditor can successfully argue that the debtor has real control over it.

 

If you would like to create an Asset protection plan for your property we would be pleased to help you