Asset Protection Planning
Do you worry about losing valuable assets due to action by creditors or a judgment against you? Do you wish there was a way to protect what is yours? Asset protection planning may be the solution you are looking for. It is a way to limit creditors’ access to your assets. This is accomplished by repositioning them so that they are beyond the reach of creditors.
The potential value of asset protection planning need hardly be stated. However, it must be accomplished carefully. Otherwise, you could run afoul of debtor-creditor law.
Asset protection planning involves taking your nonexempt assets, that could otherwise be subject to claims by creditors, and changing their status to exempt. Creditors cannot place their hands on exempt assets.
When you reduce your nonexempt assets, it may make you judgment-proof in the eyes of the law. In other words, you are not able to pay damages out of your nonexempt assets even if someone wins a lawsuit against you. For this reason, asset planning protection may help you to avoid a lawsuit altogether. No one wants to go to the trouble and expense of suing someone if they do not stand to get anything out of it.
Asset protection planning reduces your visible net worth, granting you financial privacy. In a sense, it removes a target from your back, reducing the risk of predatory legal action or frivolous lawsuits against you.
If you choose to engage in asset protection planning, it is important to approach it carefully. Failure to comply with the applicable laws during the process not only does nothing to protect you, but it can also get you in trouble with the law.
In other words, if you do not approach asset protection planning carefully, with an eye toward compliance, it may look as though you are making fraudulent transfers with intent to deceive a creditor. Such activity is illegal in all 50 states.
If there is already a lawsuit or judgment pending against you then, unfortunately, it is already too late to begin asset protection planning. To prevent the appearance that you are attempting to defraud a creditor, the process must take place before there is any indication that someone may file a complaint against you. In other words, like other aspects of estate planning, asset protection involves anticipating the worst that could happen and preparing for it well before it actually does.
Asset protection planning should only be attempted with the assistance of an experienced and qualified estate planning lawyer in Roseville, CA. Contact a law office for more information.
Thanks to Yee Law Group for their insight into estate planning and asset protection planning.