What is asset protection planning?
What is asset protection planning?
Asset protection planning is planning to take proactive legal action to protect your assets from the possibility of creditors, divorce, lawsuit or judgments. The purpose is to deter potential lawsuits and creditors. Asset protection planning is meant to frustrate or impede creditors’ ability to seize your assets or collect judgments.
Is asset protection legal?
This may be something you’re wondering and the answer is, yes, asset protection is a legal practice. As long as you are not planning to defraud your creditors there is nothing illegal about planning to protect what’s yours. This is why it is important to work with experienced advisors and discuss the timing of your planning prior to taking any action.
Who should consider asset protection strategies?
If you are in a high-risk profession, such as physicians and paramedics, contractors and architects, and pilots and recreational flyers, you are encouraged to consider asset protection strategies. In addition to these, political figures, entertainers, professional athletes, high net worth individuals, and others in the public eye are often the target for lawsuits and are individuals who should consider strategies to limit their exposure as well.
When should you start looking into asset protection planning?
If you have any sort of public exposure, start right away. You should start planning prior to any significant claim that may be made against you. A claim does not arise when the lawsuit or judgment is made against you, but instead, it arises when the underlying circumstances or even that caused the claim occurred. If you suspect that you might be sued, but you have not yet been sued, it might be too late to do protection planning.
Does asset protection mean that creditors cannot seize any of my assets?
No. While some strategies offer full protection against liability, other strategies seek to either isolate and contain risks or make it difficult and expensive for creditors to reach assets. No technique is truly guaranteed, but if executed, implemented, and administered properly, you should not delay your asset protection planning.
If you have any questions or concerns, or are in need of legal advice or representation, please contact Lvovich and Szucsko or call 415-392-2560.