Beginning Asset Protection
Getting comfortable with the commitment to protecting your assets is the first step. Creating a financial security plan is a lawful and moral decision in which that all of us have a right to participate. There are ways to protect your assets in the midst of legal duress. It is ideal, however, to shelter your assets from a creditor prior to times of legal duress or are transferring assets before you have legal liability, so you can be clear of what is called “fraudulent transfer.” Taking a proactive step to secure your family’s financial future is a healthy objective.
The legal system can very quickly turn into a virtual minefield of threats to your lifetime accumulated wealth and ability to provide for you and your family. Being able to take advantage of laws and legal tools to protect your assets is using the same system for your own financial protection.
Asset protection planning should be conducted in compliance with all laws and implemented without any intent to defraud or intentionally shelter your assets from those who may have a fair request to satisfy an obligation you made. The moral decision is based on taking action to reduce the exposure of your assets to frivolous or unwarranted liability, even if it makes its way to a judgment. This is a case of preservation, no different than learning self-defense. Asset protection defends you from legal harassment or from becoming a target simply because your wealth is out in the open and exposed.
Asset protection has been adopted as a legal specialty over the last several years and old, established associations and organizations such as our own grow this arm of the legal industry. Tools and instruments designed solely for protecting the wealth of individuals are well understood by the courts and can be used to defend your financial future. It is up to you whether or not you choose to secure your financial future by taking advantage of the tools and resources that are legally available.
Taking measures to protect your financial security should ideally be done during times of no legal duress. Most of us believe that seeking legal help is a reactive initiative; you hire legal assistance when you need to respond or defend against something. In the case of asset protection you are assembling the resources when you don’t “need” them. Timing is critical to creating well-defended legal protection of your finances; courts will negate a desperate transfer of assets in the face of a threat. Most individuals will take asset protection seriously only when they are faced with a lawsuit or pending legal threat and the apparent need for protection will fade away when assets are diminished and the crisis period is over.
Relying on a financial foundation that is protected by a skilled plan is peace of mind for you and your family. Correct and proactive measures are the only way to get there.
Points to Remember
- Asset protection is legal and moral
- Solid planning is critical to protecting your financial future
- Accept the legal system for what it is and take measures that protect you
- Asset protection is a continuous commitment
- You should to work with experienced and qualified professionals
- Protect all of your assets, even future assets
- The most secure starting point is right now
Your Asset Protection Goals
Your primary objective should be to ward off a frivolous claim or unreasonable settlement and maintain your financial picture during a legal storm. There are a number of ill-advised actions that have been attempted in the face of legal threats: gifting assets to a friend, spouse or children, selling them for less than their value and many more. The true test of an asset protection maneuver or action is whether or not your creditor can persuade the court into ruling that your action was a deceptive act to move assets out of their reach. There are ways to protect assets even if they do so rule but it is preferential to acquire the “legal insurance” before a “legal car wreck”.
It is best that your asset protection pass the fraudulent conveyance test in order to succeed in a court of law. Last ditch efforts to move assets during legal duress are rarely successful. You cannot bypass financial obligation by tossing your assets to someone you trust or another equally injudicious attempt to shelter from a creditor claim. Your legal opponent can very easily recuperate your assets after knee jerk attempts to protect your wealth. Most states will follow the Uniform Fraudulent Conveyance Act (UFCA) or the Uniform Fraudulent Transfers Act (UFTA) and the rest will fall back on English common law that resembles the principles in American fraudulent transfer laws as well as the UFCA and UFTA.
If you would make an attempt to preserve your financial security in the face of a legal threat, why wouldn’t you take the time to do it right so that you don’t have to worry?