Asset protection is typically sought out by high-net-worth individuals concerned about creditors or lawsuits dismantling the assets they’ve worked so hard to build. Not everyone needs the added layer of security that asset protection provides, but if you have been considering a wealth defense strategy, putting protections in place may be the right option.
What is asset protection?
Creating an asset protection plan is like putting up barriers around your wealth that keep both personal and business assets safe from seizure, creditors, litigation, and unfair taxation.
Asset protection is completely legal in California and is even considered a crucial component of estate planning, especially for individuals with significant wealth. Others who should consider asset protection include the following:
Homeowners who are upside down on their mortgage
Anyone with large or recurring amounts of credit card debt
Anyone in a high-liability profession, such as a doctor or lawyer
If you are an investor, a doctor, or an entrepreneur, you may already be concerned about the complexities of estate planning. Adding asset protection strategies to your plan may seem like overdoing things, but working with a legal expert to establish safety measures can work to make your estate planning efforts easier overall.
Asset protection certainly isn’t limited to the wealthy, either. Individuals with a modest net worth may still stand to benefit from the security of a particular plan.
5 Questions to Ask Yourself About Asset Protection
In order to determine whether asset protection is right for you, consider these five questions:
1. Why might I need asset protection?
While anyone can benefit from it, the main reason to consider building an asset protection plan is because you have reason to believe your wealth may be vulnerable to lawsuit plaintiffs, creditors, or the IRS. An asset protection plan can keep your real estate, liquid capital, and other assets out of the hands of creditors and others for the rest of your life, even beyond.
2. Will a protection plan meet my needs?
When drafted by a knowledgeable professional, asset protection is a unique plan designed specifically to meet your needs. Consider any one-size-fits-all plan a red flag. Each asset protection strategy should be tailored not only to your assets but to the specific threats that concern you.
3. Can I change my asset protection plan in the future?
Asset protection (estate planning in general, really) should not be considered a one-and-done event. As your assets and personal circumstances change, your asset protection plan should be updated to meet your new needs.
4. How and when should I get started?
It is never too early to start estate and protection planning. You don’t need to wait until your assets reach a certain level, either. Speak with an attorney who works in asset protection and has a strong understanding of California estate laws. Getting qualified legal advice can save you and your beneficiaries millions or even tens of millions of dollars.
5. What should I ask an asset protection attorney?
Not every estate planning attorney is equipped to work in asset protection. Therefore, before working with a legal representative, it would be wise to ask these questions:
How long have you been helping clients with asset protection plans?
How will an asset protection plan benefit me specifically?
Can you protect my assets for my beneficiaries?
What types of due diligence do you employ regarding offshore trustees?
How will this plan protect me from aggressive creditors?
An experienced asset protection attorney will be happy to answer these questions and others in great detail.
Get Your Assets Protected as Soon as Possible
Life is unpredictable, and you never know what circumstances could threaten your assets. To protect yourself, your future, and your beneficiaries, consult with an estate planning and asset protection attorney as soon as possible. Heritage Legal, P.C. offers estate planning, including asset protection planning, throughout the Palm Springs, CA, area.