Asset protection is the process of organizing your affairs and holdings in advance to guard them from loss. More than a simple tactic, asset protection combines and integrates business entities with trust and insurance mechanisms along with tax-favorable strategies to separates liabilities, mitigate risks, and insure against dangers. Asset protection covers everything from prenuptial agreements to estate plans to “soft” assets such as values and philanthropic desires. In short, asset protection should:

• First and foremost, consider your specific goals, matching specific strategies with your unique needs, values, and objectives.

• Limit your legal exposure by using entity planning to hold non-movable assets, create irrevocable trusts, and restrict involuntary transfers.

• Be integrated fully with your overall financial planning.

• When appropriate, strip assets and homes of equity that can be easily attacked.

• Use specific legal exemptions that remove certain properties from the purview of creditors

• Create an incentive for creditors to settle and/or limit the collection process.

• Consider shifting assets to protected jurisdictions.

Who Needs Asset Protection?

Asset protection plans are vital to the long-term financial well being of business owners. You need asset protection if:

• You are subject to liabilities.

• You are personally liable or a guarantor of bank loans or business leases.

• You have employees.

• You are an officer or director of a corporation.

• You are the trustee of a pension plan.

• You are a partner in a partnership.

• You are married or have children.

• You drive a car.

• You have a business interest that involves materials or services that are regulated.

• You are on the board of a charitable organization.

• You want a safe and secure retirement.

• You want to control the distribution of your assets to heirs.

 Asset protection is not tax planning, estate planning, or investment planning, though each is included in a full asset protection plan.

Asset protection also does not seek to hide assets or evade taxes. In fact, part of a secure asset protection plan is a component that provides some assets to creditors in the event you are in a lawsuit. By keeping some of your assets available to creditors, wealth holders are able to pay fair and reasonable liabilities while protecting the majority of their wealth from runaway jury verdicts, extreme taxation, and other unfair liabilities.