Asset Protection 101

Asset Protection basics that will cover legal concepts, tools and asset protection strategies in plain English. Asset Protection Planners, Inc has helped protect millions of dollars in liquid assets, tens of millions in real estate and hundreds of millions in investments for our clients. We'll address the popular topics and questions about asset protection.

Forms of Asset Protection

Asset protection tools aren't limited to legal entities, trusts and other popular protection vehicles, an asset protection tool can be as common as auto and home owners insurance, for example. You probably already have some form of protection the cover small vulnerabilities. Driving is probably one of the most dangerous things you can do, so how could you start protecting your assets at the source vulnerability? Be insured, not just insured, but purchase the maximum coverage available. Try getting insurance for your home and cars from the same provider and have a single policy that protects you from liability in an automotive accident. Before your assets are at risk from a legal opponent, implement everything you can do that will create a barrier between your assets and a legal predator. Purchase and lease vehicles under your own name and if you're an entrepreneur, write off the expense, but don't title your vehicle to your business, that is extremely hazardous and exposes your business revenue and its assets to the legal system. Just with this one type of asset protection in the form of automotive insurance, you are protecting yourself from being held personally liable in the event of an accident. The most coverage you can purchase is the goal here.

What Not To Do

There are some things you need to be aware of and know about, some types of (so called) "asset protection" will actually land you in criminal court, put all of your assets at risk or both. This is how you can spot an asset protection scam or a tool that will get you in some hot legal water.

• Tax Savings - Anything that says that your asset protection plan will save you money on taxes is a one-way ticket to trouble. Protecting your assets and your tax liability are not related. U.S. Citizens are responsible for taxes on a worldwide income basis, your money can be held anywhere, you owe taxes on your income, regardless of where it comes from. Do not let anyone advise you that an asset protection plan, tool or strategy is a "tax free" initiative or will "save you money on taxes". To name a few asset protection scams, Common Law Trusts, Constitutional Trusts, Deceptive tax plans, Nevada Trusts, Massachusetts Business Trusts or anything with an agenda that has to do with your taxes.
• Hiding Money - How bout we just put our liquid assets into a private, numbered or secret account in a banking jurisdiction and call that asset protection? Anything deceptive in nature is not a good idea, you do not have to lie, hide, scam or cheat a system to have a strong asset protection plan and legal strategy that is bulletproof.
• Give It To Your Mother - How bout you just sign everything over to someone else, and you don't have to worry about someone getting your assets if you are defeated in a court of law? Not a good idea, you still have your assets unprotected and within reach of the legal system and its players.

Other Forms of Protection

• Bankruptcy - This (depending on your state) will help protect your home, investment accounts, IRA's, 401K's, etc. This is one tool that you can use to help protect some of your assets. This isn't a scam, not a legal entity that you own, but an asset protection device that you can use depending on the circumstance.
• Insurance - Here you can buy coverage for known areas of risk, such as owning a home or place of business, driving, etc. This is a tool that should be considered your first line of defense. Be insured, get as much as you can purchase and when/if the time comes, you let the insurance company stand between a legal opponent and your personal wealth.
• The Corporate Veil / Corporate Shield - This will help protect your personal assets from business liability. As long as you operate and seed your company properly, you have substantial asset protection afforded by the legal statutes in corporate law. This does have its drawbacks and isn't 100% effective and shouldn't be relied on as your only form of protection. Owning property under an LLC is great for protecting that asset, however if your asset produces risk, it jeopardizes everything within the same legal structure.

Total Asset Protection

There is only one type of asset protection tool that has yet to be broken and that's the Asset Protection Trust and specifically an Offshore or Cook Islands Trust. This is how you take all of your assets and simply remove them from the U.S. legal system and put them into a legal system that discourages frivolous lawsuits and makes a very expensive, time consuming and near impossible arena for a legal predator to prey. We will walk through this in more detail as we cover the rest of the subjects.