Asset Protection
What is
asset protection?
Asset protection is risk management planning that is designed to discourage a potential lawsuit before it begins or to promote a settlement most favorable to the client. The risk being managed is the legal risk that the client may lose wealth in a lawsuit. It is fundamentally prelitigation planning.
Although there are exceptions
such as statutory
exemptions and spendthrift trusts, the law generally frowns upon asset
protection. No one has an inherent right
to protect his assets from creditors, other than state law or federal
bankruptcy law provides – so much of asset protection takes advantage
of legal
loopholes in the same way that many tax shelters attempt to take
advantage of
the tax code: by exploiting the unintended effects of statutes and
court
rulings intended to do something else.
Why do you
need asset protection?
There are many sources of
liability that most people
encounter no matter how cautiously or prudently they may act:
Medical Bills.
A
motor vehicle accident.
An
accident in or around your home
or business.
An
accident or injury caused by someone else for whom you are responsible
such as
an employee, partner, subcontractor or even a child or family member.
Something happening on the
job.
Inability to fulfill an
important
contract.
Professional malpractice.
Negligence as an officer or director
of a corporation.
Business debts for which you are
personally responsible.
Tax and other government
claims.
Divorce or separation.
This list, of course, can go
on endlessly, but the
point is that no matter how safe and secure your financial situation
may appear
today, you can never be absolutely certain that your hard earned assets
won’t
be in jeopardy tomorrow. What is
unfortunate is that many families lose substantial assets when
creditor
claims arise. Yet any family can
legally and effectively protect assets by taking timely and decisive
action to
fully protect its property BEFORE, NOT AFTER THERE IS A POTENTIAL CLAIM!
Five Rules for Asset
Protection
While there is no perfect strategy that will protect all assets all the time, good asset protection planners employ known strategies that creditors have not yet defeated and strategies that have not been identified. Asset protection is incredibly dynamic. Changes in the law can come quickly and can invalidate even tried-and-proven strategies.
Timely action BEFORE you have a problem is the MOST important ingredient for successful asset protection planning. Generally speaking, it will be too late if you wait until you have a substantial claim against you to do something.
Review your program at least annually to insure you remain fully protected.
As a general rule, your creditors can attach whatever property you have to the extent of your rights in the property. To effectively place control over an asset beyond the reach of creditors, you must be willing to surrender some control over assets you now completely control. Most people agree, however, that the degree of control they may have lost was a small price to pay for the protection they gained. Also sometimes your best asset protection strategy may present adverse tax consequences or interfere with the ideal disposition of your estate. Decide which of these factors is most important to you.
Asset protection requires close guidance and cooperation between your attorney, accountant or tax advisor, financial planner and even your insurance agent. Each brings to the planning process special professional skills. Because asset protection has as its prime objective the insulation of assets from creditor claims, choosing the right attorney is essential. Just as you would seek a criminal defense lawyer or divorce lawyer should you be involved with those problems, it is equally wise to engage a legal specialist experienced in financial protection and debtor-creditor law.
Deploying
your assets to provide
maximum protection from creditors is neither immoral nor unlawful. You have an obligation to yourself and your
family to protect and preserve what you have worked so hard to
accumulate. The attorneys at Lord Law Firm
understand and
underscore the importance of a legal, defendable plan that can
withstand
challenge as opposed to a sham or fraudulent transfer that can only
leave you
as vulnerable as before you started.
Please feel free to contact us anytime for a free and
confidential
consultation by telephone, e-mail, or in person by appointment.
Lord Law Firm, LLC
7436
Broad
River Rd., Ste. 110
P.O.
Box 2735
Irmo,
SC
29063
Tel.
803-407-4140 Fax. 803-407-4710
Email: ray@lordlaw.com