Is Asset Protection Planning Right for Me?
Whether affluent or middle class, chances are you have worked hard to get the things you own. Yet just a small run of financial misfortune can be enough to put it all in jeopardy. Indeed, a recent Careerbuilder.com survey determined eight out of 10 workers live paycheck to paycheck. That means divorce or bad investment could threaten their car, their house and everything in it. Do you have a plan for protecting your personal belongings should the worst happen? If not, asset protection planning may be exactly what you need. This financial planning tool helps you legally safeguard your assets from creditors. Don’t think it can help you? Keep reading to learn otherwise.
What is Asset Protection Planning?
Put most simply, asset protection planning is preemptive legal action taken to guard your assets against things like future creditors, divorce or judgments. Unlike illegal methods of asset protection, asset protection offers a legitimate way to help you keep your most valued belongings in your control. Whether your total assets are worth $100,000 or in excess of $1 million, there are ways to make a plan that will protect them. Some of the tools include:
- Offshore asset protection trusts
- Accounts-receivable financing
- Family limited partnerships
- Limited Liability Corporations
and much more. Anyone of these can apply to your situation. Simply talk to an estate planner to learn which would be the ideal fit.
Who Needs Asset Protection
It’s easy to think this type of planning is only for the wealthy, but people of various income levels can benefit depending on two factors: risk and value. Are your assets like your car and home worth more than what you currently owe? Then the value of your goods makes you an ideal candidate – especially if you are a high risk of having goods seized in a divorce or even a creditor lawsuit.
Insurance Isn’t Enough
It’s common to think that different insurance policies will protect you in a time of crisis. But what happens if you are at-fault in an accident, and the victim’s expenses exceed what your insurance will pay? That leaves all of your assets exposed. On the other hand, a strong asset protection plan will provide an added layer of security, limiting what lawyers can come for and protecting you from financial ruin.
You earned your assets fair and square. Keep them safe. Consult Memphis probate and estate administration lawyers to learn more about how the right asset protection planning can help you.
Thanks to Patterson Bray for their insight into estate planning and asset protection planning.