You’ve worked hard to build wealth and provide for yourself and your loved ones. The next step on your to-do list? Developing a strategic asset protection plan to safeguard your assets from potential risks.
For business owners, real estate investors, and other high net worth individuals, risks such as lawsuits, creditors, and bankruptcy can threaten your investments. However, thoughtful estate planning and asset protection can ensure your family is covered for generations to come.
Asset protection is the process of strategically housing your assets to shield them from being subject to civil judgements or claims by creditors. In practice, this can manifest in a number of ways, including:
- Trusts: Assets held in asset protection trusts (APTs) are not considered personal property, providing you the strongest protection from any judgements against your estate. Currently, 17 U.S. states allow for the creation of a domestic APT. Residents of other states can turn towards a foreign or “offshore” APT.
- Limited Liability Companies (LLCs): For individuals with business ventures or real estate investments, establishing an LLC can provide liability protection for personal assets. This means that in the event of a civil judgment or bankruptcy suit, assets like primary homes and vehicles are protected.
- Insurance: Insurance policies such as umbrella liability insurance and excess liability insurance are also key to a strategic asset protection plan. Umbrella liability insurance can protect against the costs of lawsuits and other legal claims. Excess liability insurance is similar, but typically provides coverage for business owners in excess of policies like a commercial liability policy.
As with any estate planning method, enlisting the assistance of a seasoned attorney with experience in asset protection will help you develop a strategic plan that’s tailored to your unique goals and financial situation. For guidance on protecting your assets and other estate planning matters, contact us.
Related practices: Estate Planning, Divorce & Family
