Asset Protection Planning is a strategic, preemptive preparation to prevent creditors from obtaining assets in the event of a civil judgment. It does not mean that a person ignores their obligations to debt. It means that a person will control their obligations to debt.
Wars are fought everyday over land, dowery’s and assets. Most wars are fought, at least publicly over principles, however just like litigation, the money is never very far from center stage.
“If you follow the story it is interesting, if you follow the money you will find out what is going on.”
What is an Asset Protection strategy?
Risk management, in terms of assets,means staying ahead of litigators and creditors. This does not mean dodging them; it means that you are giving yourself equal power. You need the power of choice which will then give you the power of settlement.
This is one of the great advanatages of practicing Asset Protection. It is not an evasive technique, it is taking advantage of the legal tools given to increase the protection of an asset and taking advantage of taxation benefits.
Wealth Preservation is the objective of Asset Protection. Without a good Asset Protection Plan a person may face a major amount of time and money defending themselves in litigation. The goal is to deter litigators from outrageous claims by using tools that are legal and allow protection. Some may look to loopholes in the law, but true planning and wealth preservation looks to the protection afforded by law. There are three sides in law, the defense, the complaint and then there is the real story or the truth. Court battles often become legal and technical battles over assets and fairness and justice are only one small part of a very big picture in litigation.
To effectively preserve wealth a person must protect and safeguard from the unforseen. In essence, Asset Protection Planning is protecting from creditors, accidents, volitile market swings, litigators and changing legislation.
How does a person accumulate wealth? One easy answer is by managing risk. Carelessness rarely generates wealth. Planning the proection of assets is a very important step of the process in Wealth Accumulation. Do you lock your car? Yes, you do because you car about your car and what is inside. If you did not care, you probably would not lock your car. Accumulating wealth in the strategic meaning is like this. You must find a vechicle that is safe and lock it up, not leaving it in harmsway. Your exposure to risk should be minimal and something that you can withstand if the unthinkable and unforseen happens to you.
Simple Practice Tips
Divide and Conquer Asset Liability
All assets are not created equal and all techniques are not created equal – to say a trust is a trust, is not true!
Use LLCs, Trusts, and companies in concert with each other
Always have adequate insurance
Vet out your state statute for your IRAs
Financial Risk Analysis
Investments Too Risky?
It’s tough to determine which investments to use if you don’t know your own risk tolerance.