Asset protection is the fortification of your financial and physical assets to keep them from being taken by a creditor or to settle a lawsuit against you. If you want to protect your assets, you must plan in advance. If you anticipate a lawsuit against you, you are already too late. Asset protection is also off limits if you currently have a lawsuit in court or a creditor has a judgment against you.
If you transfer an asset to a third party or another entity when you already owe a creditor or if you are dealing with a lawsuit, your transfer may be deemed as fraudulent by a judge. In this case, the judge may reverse the transfer and your asset may be used to pay your creditor or for a lawsuit. The best time to protect your assets is before trouble arises.
Protecting your properties and making them off limits to lawsuits or creditors can help you save your home for your family to use after your death. Asset protection can also keep jointly held accounts safe from being taken to pay one beneficiary’s debts.
You can use asset protection to safeguard money for your retirement years. Many elderly face large medical bills in their later years. Make sure your money and property cannot be taken away from you when you need it the most.
Protecting your assets is part of advanced estate planning. You can begin the protection process by speaking with your attorney about which of your assets are already exempt from collection and which items are still unprotected. Once you determine what items need to be sheltered, your attorney can help you come up with a plan to safeguard those items. Some common asset protection plans include Family Limited Liability Companies or Irrevocable Living Trusts.
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