Asset Protection in Financially Unsafe Times

If questions about asset protection in financially unsafe times are on your mind, you’re not alone.  In addition to wondering “how do I protect my assets from lawsuits?” one primary area of concern has been the preservation of purchasing power in uncertain economic times, because there are additional risks to your assets besides lawsuits.  Let’s consider a few.

Here’s are two related email question we recently received:

• How do protect my home from lawsuits? [sic]
• How do I protect the value of home when real estate prices are plummeting?

In a sense, these are both asset protection questions, though the first question is more of a traditional asset protection query.  The answer to the first questions simply depends on where you live.  If you live in Texas, Florida, or a couple of other states, chances are that your primary home is already in a class of assets called exempt assets and is, therefore, protected from lawsuits by state homestead laws (also see this article on exempt assets).  If you don’t know how much asset protection your state gives in the way of homestead protection, contact an asset protection attorney to talk about it.  After all, asset protection begins with analysis!

On Locking In The Value of Real Estate

The second question listed above is a little bit more complex, and it involves stripping equity out of real estate and then putting it in a safe place–a place beyond the reach of creditors–like an offshore asset protection trust.  In essence, equity stripping is a way to shift economic risk based on established legal principles that dictate who takes a loss when the value of real estate declines.

Asset protection in financially unsafe times simply means that you realize and anticipate that the value (and purchasing power) of your assets can decline due to factors beyond your control, like macro economic conditions.  By asking questions like how do I protect my assets from lawsuits and how do protect my home from lawsuits, you are starting down the path of planning to preserve your buying power over time, which is just as important as learning how to protect yourself and shield your assets against frivolous lawsuits and other creditor claims.

Recognizing that your assets are at risk even if you are not a likely target for lawsuits makes it imperative that you take active steps to preserve your hard-earned wealth from declining in value because of hazardous financial conditions that could cause the most massive loss of wealth in the history of our country.