Most people have assets; that is, money and both tangible and intangible resources. A person might own a home, car, business or professional practice; have a bank account, some jewelry, maybe a collection of baseball cards or coins, perhaps some furniture. Those fortunate enough to have a portfolio of wealth need a way to protect their assets from risk. Asset protection planning is a process by which a person can organize assets-personal, business and/or professional-and employ legal tools to guard against risk of future creditors. Asset protection techniques are designed to deter potential creditors from taking collection actions by making it difficult or impossible for them to take hold of a person’s assets or collect judgments.
There is a very sharp dividing line between legalasset protection planning and criminal actions to defraud legitimate creditors. For this reason it is essential to have an attorney’s help through the process. It is also a good idea to integrate asset protection into estate and tax planning; and, like a portfolio, asset protection should be diversified. Don’t rely on only one method.