Asset Protection And Financial Planning Go Hand In Hand
Too few people take financial planning and asset protection seriously.
Typically, most people only think about protecting their property or automobiles with the required auto and homeowner’s insurance. However, we live in a litigious society, and asset protection means keeping your property safe from being taken by someone who wins a lawsuit against you. Accidents in which someone gets hurt and non-payment of mortgage are two examples in which lawsuits can be initiated and your assets can be claimed.
How can you protect your assets from lawsuits?
This is achieved through the process of asset protection planning, which means taking assets that are subject to creditors’ claims, called nonexempt assets, and repositioning them as assets that are out of the reach of creditors’ claims, called exempt assets.
Before you can have an asset protection plan you must have a financial plan. You cannot begin an asset protection plan if you are already in a lawsuit. Some folks think they can simply transfer assets out of their names if and when they are in a lawsuit, but a court will see right through these ‘fraudulent’ transfers. The judge will have the transfers reversed and the assets turned over.
In order to put together a comprehensive asset protection plan, you will need to integrate two important goals: Your short term and long-term financial goals, and your estate planning goals.
Once you examine your short term and long-term financial goals, you will learn about your current and future sources of income, how much money you will need to retire, and how much will be left over to pass on to your heirs through your estate plan after you die. When your financial plan is in place, you can review your current assets to determine if they are exempt from creditors and, if they are not, then reposition them to become exempt. A financial plan will also allow you to plan for positioning assets that you intend to acquire in the future to be protected from potential creditors.
You never know if you will ever be involved in a lawsuit.
But, you can have a plan in place that will protect you in the event that you are. Today there are digital assets as well as the more traditional tangible assets to protect. Have a plan in place that will protect you in the event the unexpected happens. Call The Estate & Asset Protection Law Firm for a consultation.