02 Oct Asset Protection 101
Asset Protection 101
What is Asset Protection?
Asset Protection is when you use existing laws in the appropriate manner to obtain the best possible level of protection for your assets. It combines legal analysis with financial review and sometimes implementing estate or business planning strategies to make you a less desirable target.
What Types of Risks Should You Plan For?
- Personal liabilities – business deals, car accidents, employment claims
- Professional liabilities – dentists, doctors, lawyers, accountants, and individuals in the healthcare, construction or manufacturing industries
- Business owners – company debt or actions which lead to a claim, landlord responsibilities to tenants and daily contractual liabilities are all potentials for loss
- Other liabilities – Unpaid taxes, co-borrower obligations and uninsured incidents
How Do You Plan?
Your legal, tax and financial advisors should take a team approach when developing the best structure for your plan. By involving your entire advisory team, you should be able to achieve both your daily and long-term financial goals. The planning starts with discussing potential creditors, claimants and other fears. Then your advisors should conduct a thorough review of financial assets, structure your estate and business plans accordingly, and then utilize opportunities and strategies to improve and protect.
Isn’t Asset Protection Only for the Ultra-Wealthy?
Asset protection can be accomplished for small estates with simple strategies but is sometimes more complex when an individual has more wealth. Wealth is not the only trigger for asset protection planning though. Those that have less to lose are sometimes more in need of this type of planning than others.
What is the End Result?
The key is to understand that any strategy is implemented to protect against the unknown. Those future events and factors may play out differently than envisioned today and so review and updating your planning on an ongoing basis is required. Even with proper planning there should always be the expectation that your structure will be challenged, but sometimes simple steps or sound planning can help avoid those liability traps down the road.