What is asset protection?

Question:  What is asset protection?

Response:  Asset protection is an organizing of your assets--personal, business and/or professional. Asset protection uses various legal devices to guard against risk of future creditors. Asset protection techniques are designed to deter potential creditors from going after you, and discourage them if they do, generally by making it difficult or impossible for them to take hold of your assets or collect judgments against you.  

However, asset protection planning should not be a replacement for insurance, but merely a backup method to shield your wealth should you be hit with a big judgment that isn't fully covered. Being sued is not the appropriate time to begin asset protection, because there is a greater risk that a transfer will be invalidated as fraudulent.

However, one must be carefully asset plan, because there is a distinct line between "legal" asset protection and criminal actions to defraud legitimate creditors. It is essential to have an attorney guide you through the process. It’s import to use asset protection into your estate planning and use various methods to achieve this goal.

Answered by Bert Gonzalez

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