Asset protection planning isn’t just for the wealthy! You may not have a particularly large estate or varied assets, but asset protection planning is a strategy anyone can use to keep their money safe from various financial issues. If you own real estate, a car, a retirement plan, investments, or other such assets, then it’s worth reading up on the process to see if it might benefit you in the future.
What Is Asset Protection Planning?
Although it has various uses as a general estate planning tool, asset protection planning can provide you with a wide variety of techniques to shield your assets from future creditors. Rather than acting as a response to current financial problems, however, it serves as an additional level of foresight on your estate plan. If you use it wisely, asset protection planning can save you plenty of money in the future.
Why Do I Need It?
You may need asset protection planning in the event that your assets are threatened by a legal or financial issue. When used correctly, it can prevent potential creditors from seizing your assets. For instance, it may come in handy if you’re ever involved in a lawsuit, if your home goes through a foreclosure, or if one of your debts goes to collections. Asset protection is also essential from a general estate planning perspective, because it often means saving more money for your heirs.
Is It Legal?
Asset protection planning is not the same as avoiding or defrauding a creditor. In other words, you can’t use it to weasel your way out of an existing debt. Otherwise, asset protection planning is a perfectly legal and legitimate estate planning method. You just have to start enacting your strategies well in advance of any claims against your assets.
Who Benefits From Asset Protection Planning?
Among those who benefit most from asset protection planning are people in high-risk professions like medicine, architecture, construction, and aviation. People who spend a lot of time in the public eye—like politicians, entertainers, athletes, and high net worth individuals—may also be at higher risk for lawsuits, making them perfect candidates for asset protection planning. That said, many people can benefit from the practice as a way to reduce fees and taxes on your estate.
What Tools are Available to Me?
The asset protection planning strategies you use will depend on your assets and your personal circumstances. Trusts are wonderful estate planning tools in general, but they can also protect some of your assets from creditors. You might also consider opening an insurance policy, creating a business entity, and contributing the maximum amount to your retirement plan.
To find out which asset protection planning tools will work best for you and your family, contact Estate & Long Term Care Group. Our knowledgeable estate planning attorneys will help you minimize your financial risk while maximizing the assets you leave behind for your loved ones.
Written by ELTC Law Group
