The kind of assets one has today can define their tomorrow. However, there are situations where creditors can repossess these assets. So, wise people have strategies to protect their assets against liens, repossession or lawsuits. In most cases (and depending on the financial situation of an individual), asset protection planning may require some knowledge on Bankruptcy Laws, Estate Planning laws as well as Tax laws.
Just to be clear, the asset protection plans are never a means to forfeit your responsibility to the creditors or taxman. Rather, they are meant to secure your property, money, retirement accounts and even cars from creditors in a legal way. In fact, the decision to protect assets should be influenced by your lifestyle, net worth and short term or long term financial goals.
It suffices to say that individuals with the potential of undergoing insolvency (due to the risks attached to their investments) need the program the most. It is worth reiterating that even for these individuals; this program is not a means to hide an individuals wealth. In fact, it should not give way to misappropriating funds from a trust.
Contrary to what most people may believe, individuals and families are not the only beneficiaries of asset protection plans. In reality, many entities can fall under a good plan. For instance, a dynasty trust or business unit can benefit from legal protection. Overall indemnity policies, secret trusts, limited liability firms and even trust for people with special needs can all be protected.
Individual arrangements and family trusts make another group of assets eligible for protection. Your plan may also involve offshore corporate trust and investing schemes in some cases. In some jurisdictions, credit shelters and such like can be protected legally.
The key rule to effective planning is doing it in time. It will serve you right if you were to plan before claims arise to avoid lawsuit(s). Now, late plans may not just make things worse for you but can attract bankruptcy charges. You may even end up paying the creditor legal fees in some cases.
If done properly, this kind of strategy has a number of benefits. First, it helps you to categorize your liquid assets in a way that creditors cannot pursue them. In fact, the more liquid assets you have in checking account, for example, the easier it is for creditors to recover it. Planning also reduces the chances of lawsuit as most of your property is protected. You should know that creditors can only sue you for unprotected property and the fewer such are the better for you.
Another benefit of property plan is that it fills in the gap left by your insurance cover. It is a fact that every insurance policy has a limited scope thus would never cover all your assets. With a plan to protect your assets, you can cover all the important properties and protect them against creditors. Last but not least, you asset plan guarantees the safety of your money even if you were to lose your job. In fact, under a good plan, you are never susceptible to claims (no matter the nature of financial constraint you end up in).
Just to be clear, the asset protection plans are never a means to forfeit your responsibility to the creditors or taxman. Rather, they are meant to secure your property, money, retirement accounts and even cars from creditors in a legal way. In fact, the decision to protect assets should be influenced by your lifestyle, net worth and short term or long term financial goals.
It suffices to say that individuals with the potential of undergoing insolvency (due to the risks attached to their investments) need the program the most. It is worth reiterating that even for these individuals; this program is not a means to hide an individuals wealth. In fact, it should not give way to misappropriating funds from a trust.
Contrary to what most people may believe, individuals and families are not the only beneficiaries of asset protection plans. In reality, many entities can fall under a good plan. For instance, a dynasty trust or business unit can benefit from legal protection. Overall indemnity policies, secret trusts, limited liability firms and even trust for people with special needs can all be protected.
Individual arrangements and family trusts make another group of assets eligible for protection. Your plan may also involve offshore corporate trust and investing schemes in some cases. In some jurisdictions, credit shelters and such like can be protected legally.
The key rule to effective planning is doing it in time. It will serve you right if you were to plan before claims arise to avoid lawsuit(s). Now, late plans may not just make things worse for you but can attract bankruptcy charges. You may even end up paying the creditor legal fees in some cases.
If done properly, this kind of strategy has a number of benefits. First, it helps you to categorize your liquid assets in a way that creditors cannot pursue them. In fact, the more liquid assets you have in checking account, for example, the easier it is for creditors to recover it. Planning also reduces the chances of lawsuit as most of your property is protected. You should know that creditors can only sue you for unprotected property and the fewer such are the better for you.
Another benefit of property plan is that it fills in the gap left by your insurance cover. It is a fact that every insurance policy has a limited scope thus would never cover all your assets. With a plan to protect your assets, you can cover all the important properties and protect them against creditors. Last but not least, you asset plan guarantees the safety of your money even if you were to lose your job. In fact, under a good plan, you are never susceptible to claims (no matter the nature of financial constraint you end up in).
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