Asset protection planning keeps your assets safe from creditors, including those who get a judgment against you. While many people assume that “hiding” your assets from creditors is illegal, if you protect your assets properly, it is entirely legal and can be extremely beneficial.
Asset protection planning requires a great deal of forethought and strategy. Getting started now, before you have threats from creditors, is a must. Below are just a few benefits that you can experience from asset protection planning.
1. Asset Protection During a Lawsuit
As soon as a lawsuit starts, the plaintiff may be able to “attach” some types of property. State law allows them to do this in some situations to ensure that the defendant (you) has the assets or funds to satisfy their judgment if they get it at the end of the lawsuit.
Proper asset protection planning can make attaching certain property during a lawsuit virtually impossible, or at least extremely difficult.
2. Protection from Judgments
Even after a creditor or other plaintiff receives a judgment, he or she still has to collect on it. You can place some assets out of reach of these creditors so that particular property can remain untouched even if the judgment is substantial.
Keep in mind that asset protection planning shields assets from not only creditors but also anyone who may sue you and obtain a judgment for any reason.
3. Financial Privacy
One of the benefits of asset protection planning is privacy. You can keep what type of assets or the quantity of property you own to yourself. You can also reduce your “visible” net worth by using asset protection planning as well.
While financial privacy may not be very high on your priority list, this type of confidentiality can prevent or discourage frivolous lawsuits. You are essentially removing some of your assets from the public eye, or at least making them harder to associate with you, by using proper asset protection planning.
4. Avoiding Lawsuits
Some individuals will target individuals if they know they have assets to pay for a judgment. If you can make it look like you less, that can dissuade others from asserting legal claims against you.
Litigation is expensive, particularly if you are defending yourself. Preventing a lawsuit to start with can help you avoid those unnecessary costs and time.
Adequately protecting your assets can save you significant time and money in the long run. The team at Matus Law can help you set up a plan that works for your unique financial situation and accomplishes your goals. Keep in mind that this type of planning must be done long before you actually need it for it to be valid and legal. Contact us today to learn more.