Asset protection is a critical aspect of the estate planning process. It can keep your property out of the reach of potential lawsuits, including any plaintiff who may accuse you of negligence in an auto accident case or a lender who ends up foreclosing on your home after you stop making mortgage payments. Sitting back and hoping that you can hold on to your assets won’t help. You have to be proactive in taking steps to protect what’s yours.
What is asset protection planning?
Many of the assets that most of us own aren’t exempt from the reach of possible creditors. You can protect certain items that you own from seizure or liquidation if someone sues you civilly by engaging in asset protection planning, though.
Asset protection planning can protect you as you start to live on a fixed income in retirement as well as your heirs, who may count on you for future support. Many individuals who engage in asset protection planning establish irrevocable trusts or limited liability companies to care for their own or loved ones’ needs should they become mentally or physically incapacitated or pass away.
When should I engage in asset protection planning?
You must take measures to protect your assets well in advance of a plaintiff, such as a creditor, filing any claim or a judge entering a future judgment against you. Know that any instance in which you transfer assets to someone else to avoid losing them to a potential creditor is illegal. Prosecutors may charge you with fraud if you do this. They may also petition a judge to reverse any asset transfers if this happens as well.
Why asset protection planning is important
Any savvy investor or business person knows that planning for both short- and long-term financial goals involves strategizing. You don’t want to find yourself trying to protect your assets once someone files a lawsuit against you here in New York. It may be too late to save anything that you own if you do. An estate planning attorney can educate you about why asset protection is essential. Your Brooklyn lawyer can also help you strategize how to best protect what you own for your or your heir’s future use.