Most people spend more time planning a family vacation than protecting their wealth from a lawsuit. Thus, it’s one of the topics that doesn’t enter one’s mind until it happens. So, that’s the only thing in their mind. Let’s look at some asset protection planning facts and lawsuit statistics. Knowing the benefits of asset protection, gathering information about planning your strategy, then taking action can help you secure your wealth before losing everything you own.
By establishing an asset protection plan before it’s necessary, you are preserving your wealth. First, something happens that leaves you vulnerable. Then, someone hits you with a lawsuit jeopardizes. Any transfer of your assets at that point is subject to scrutiny under fraudulent transfer laws. When someone sues you and you give your assets to a family member, courts can quickly interpret it as an attempt to defraud a creditor. As such, the creditor can now sue your family member.
If you transfer assets or property knowing that someone will likely sue you, you could face with defending the asset transfer. As such, the transfer could be disregarded by a court or reversed and it may come with additional fines or penalties. Asset protection is much more difficult after you need it. However it is possible to protect yourself after a lawsuit. It is just subject to more scrutiny.
Liability can come from many situations that seem harmless, for example; one’s own home, automobile, workplace, employee, spouse, real estate investments, having a swimming pool, even minor children. Liability is all around us at almost any given time.
In some cases an individual cannot limit their liability outside of separating personal and business assets. This is where planning ahead for personal asset protection pays off.
In many business owners use corporations or LLCs to defend against business liability . In others, such as the sole proprietorship or partnership, there is no protection. Consider that liability often strikes from the least expected places. So that is why it is important to know where you are vulnerable and then take steps to protect your assets. Here are some examples of where you may be exposed.
Asset protection planning is the analysis each individual’s risk and placing a barrier around the assets exposed to that risk using an appropriate legal tool. If asset protection is needed, it comes in many forms. There are ways to shield one’s wealth from present risk and liability whether it’s from being a parent or an anesthesiologist.