Asset protection is one the best ways to guard yourself from creditors or other forms of legal action looking to take away your assets. They’ll often look into your financial situation and personal holdings to see if they can receive a debt you owe them through arrangements other than money. Understanding how to protect yourself from creditors before the threat of them knocking on your door arrives is key in maintaining your property. Here are the fundamentals to asset protection and why you should start planning now.
Defining Asset Protection
Asset protection is a plan put in place to defend your assets. This doesn’t just protect your property from creditors, but it can also protect assets from divorce, lawsuits or other legal judgments. The wonderful thing about asset protection is that it is done within the boundaries of the law. There is no need for someone to step outside those boundaries (participating in illegal practices like concealment, tax evasion and false transfers) to protect their assets.
How to Properly Plan
Consulting with a professional or an estate planning lawyer can be a great way to ensure your assets are properly handled and protected. A lawyer can assess your financial status and assets and determine options for protecting them in the case of a seizure. They understand the ins and outs of the laws surrounding assets and creditors, and they can push your assets out of reach, making them exempt assets.
Examples of Assets
Assets are simply the property you own. They can include:
- Real estate
- Bank accounts
- Marketable property
Any of these things may be at risk in the case of a court-ordered seizure, so getting them all protected as soon as possible increases your chances of keeping your rightful property.
When to Plan
Ideally, you should have an asset protection plan in place before you need it. When creditors look into your situation, they’ll be able to see that your assets cannot be effortlessly taken. It is also easier to create exempt assets before a lawsuit is filed against you, though you can still look to make them exempt during the process. If you suspect a lawsuit may be filed against you, you should immediately place your assets under a protection plan.
If you aren’t sure where to start in protecting your assets, contact an estate planning lawyer in Allentown, PA who can help walk you through the necessary steps. When your livelihood is on the line, you want to make sure everything is secured properly.
Thanks to Klenk Law for their insight into estate planning and asset protection planning.