Want to protect your assets from creditors and other lawsuits? Here’s why you need to contact a local insurance agent to discuss asset protection plans!
Asset protection planning is all about protecting your assets from creditors and it’s not just for ultra-high net worth individuals!
Anyone, including you, can get sued. Lawsuits can result from credit card debt, car crashes, unsatisfied customers, bank foreclosures, along with several other things. In case someone wins a lawsuit against you, you could go bankrupt in trying to pay it off.
To secure your assets from creditors, you need to keep them in a place where creditors cannot reach them. Some asset protection techniques include moving funds to an irrevocable trust, maximizing contributions to IRAs, using family limited partnerships or limited liability companies, and retitling various assets.
In this article, we’ll discuss all about asset protection plans and why they’re important for you.
Importance of Asset Protection Plans
Asset protection plans are important because they help to keep your money and property safe during your lifetime. In fact, they even allow you to leave a meaningful legacy behind for your loved ones. Here are some reasons why asset protection plans are important.
- Security from business losses: If you have your own business, you could find yourself faced with the risk of personal loss if your company is sued or goes bankrupt.
- Security if you get incapacitated: If you become incapacitated, you won’t be able to manage your investments or take care of your property which can lead to significant losses. An asset protection plan will protect your assets in case of capacity.
Start Planning Before A Claim Arises
Many things you can do will effectively provide asset protection before a liability or claim arises, but few things will afterwards. This is because whatever you do after a claim arises can be negated by the “fraudulent transfer” law.
How Much Protection Do Asset Protection Plans Offer?
Asset protection plans are subject to tax laws. Even if you place your assets in a trust, you will still have to fulfill your tax liability.
Moreover, some judges might force you to repatriate assets placed overseas under court order. If you fail to comply with this order, you might be charged with a jail sentence.
Asset Protection and Financial Plans
In assessing your long and short-term financial goals, you will learn about your existing and future income sources, the amount of money you need to retire, and how much will be inherited by your heirs. It will then help you devise a comprehensive financial plan.
With a financial plan in place, you can review your current assets and see if they’re exempt from creditors. If they aren’t, you can reposition them to become exempt.
Last Few Words
Many people learn way too late that asset protection planning isn’t something that can be done as a temporary or quick fix. Therefore, the time to develop your asset protection plan is way before a lawsuit is on the horizon.
To discuss an asset protection plan, make sure you consult with the experts at Bay Insurance Services.