Taken literally, asset protection means
defending your assets, or your valuable possessions. Legally speaking, an asset
protection plan describes a legal structure that protects your wealth, real
estate, business, or other important assets from seizure by creditors.
Either way, doesn’t protecting the assets you’ve
worked so hard for sound like a good idea?
Asset protection allows you to preserve your
right to enjoy, use, or pass on your assets however you see fit. It’s how you
ensure that everything you’ve earned in life doesn’t fall into the wrong hands.
And it’s how you hold onto your legacy in order to decide who benefits from it.
Asset Protection Is for Everyone
Anyone can get sued. You never know when you
might become involved or be dragged into a fight. Maybe it’s over property
lines. Maybe someone gets injured on your home or business premises. Maybe you
get in a car accident. Perhaps your business is sued by a disgruntled customer
or vendor. Whatever the cause, everyone is at some risk of litigation. And if
you own a business, data
shows that up to 53% of small businesses become
involved in one or more litigations during any given year. Those are some
startling statistics.
Anyone who has assets—which means everyone—should
take steps to protect them. Here, Legally Mine reviews just some of the
important reasons asset protection should be part of your life.
1. Your Home Is Not Safe
Most of us think of our homes as a sanctuary. But when suits are
filed, your home is usually the first asset creditors go after. If you get
sued—which we’ve already established can happen at any time—your home is
anything but a safe place. Asset protection is the only way to guard it.
2.
Your Business Is at Risk
If your business is sued, you may be forced to close your doors and sell it and
its assets in order to satisfy creditors. Even if you settle out of court, the
monetary awards you’re forced to hand over would be enough to ruin many a small
business. Setting up legal protection is the best way to ensure your business
stays yours.
3.
Any Asset You Own is
Fair Game
Your cars, boats, vacation homes, savings, even valuable family heirlooms could
be at risk of seizure in the event of a lawsuit. Even if it’s your business
that is sued, if you haven’t taken the right steps to legally protect your
personal assets, they could be taken away as the spoils of litigation.
4.
You Want to Retire
If your retirement includes non-ERISA plans, the money held there could be
seized in litigation. Non-ERISA plans generally include those where an employer
is not involved. On the other hand, retirement plans with employer involvement
are generally not subject to creditors. These include ESOPs, purchase pension
plans, 401(k), and target benefit plans. An asset protection specialist can
help you ensure your retirement and other wealth is safe from creditors.
5.
You Want to Control Who
Gets Your Wealth
When you pass on, you likely plan to leave your home, business, wealth, and other
assets to your loved ones. But without the proper precautions, all of these
things could be dealt out to creditors as part of litigation or lawsuit
settlement. An asset protection strategy is the only way to ensure that your
legacy stays in the right hands.
The Time to Protect Your Assets Is Now
In the event of a
lawsuit, a judge is unlikely to give you a pass on any strategic actions taken
to protect your assets after the fact. That’s why the most important part of
your asset protection strategy is the timing, and the time is now. Whatever
methods you decide to use to protect your assets, they need to be in place
before any suit is filed. The process may be complex, but there is no reason to
put it off. Talk to an attorney or asset protection specialist today about your assets and situation. He or she can help you
structure an asset protection strategy that guards your business, home,
property, and legacy.
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