Asset protection is a process by which persons try to protect their assets from seizure by plaintiffs or creditors. These two words have become even more important during a recession, when the need to protect and preserve your wealth from creditors and plaintiffs is significant.
If you have not considered asset protection, these gloomy economic times might be a good time to start. Earlier this month, we blogged about the rising dog bite claims and employment-related lawsuits since the economy collapsed in 2008. The fact is that when times are tough, your risk of being sued by creditors or persons on the flimsiest basis, rises significantly. It is not just doctors and other health care professionals who are at the highest risk of being sued. Even if you are a regular person whose dog happens to bite someone on your property, or a small business employer who has had to lay off staff as part of business restructuring, you could find yourself named in a nasty lawsuit. Your assets might be under attack. The US legal system makes it far too simple for plaintiffs to sue a person and recover large sums of money. In a situation like this, asset protection is not just an option, but a necessity.
Fortunately, the availability of sophisticated, watertight asset protection systems means that you don’t have to resort to crude measures, like depositing your money in a family member’s bank account. There are sophisticated ways by which you can preserve and protect your assets, while continuing to enjoy and use them. These include the setting up of domestic and offshore protection trusts.
If you believe asset protection is only for the wealthy and that your limited assets don’t qualify for protection, you could be devastatingly wrong. The main thing to remember about asset protection is that many of these methods don’t work if you attempt to protect the assets after you’ve been sued. It’s important to begin the process of protecting your assets much before creditors are able to file legal action against you.
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