Asset protection is something that needs to be planned ahead. One point that needs to be made about asset protection is that by no means should it be considered something that you can do instead of having proper liability insurance. Anyone that has assets that they want to protect should have the liability and professional insurance that is needed. The asset protection plan is needed as an addition to that security.
There is an idea that asset protection plans are so formidable that a plaintiff would not even try to challenge one. That is not a truth that can be depended on though. You can't depend on an asset protection plan to cover the cost of legal fee's if there is a lawsuit that needs to be defended against.
The insurance is what is there to cover fee's is someone gets sued. That coverage is in place so that if one gets sued, the insurance company will pay for the defense as well as cover the cost of the settlement, if one is awarded. Insurance will also be what a debtor can rely on to get through a fraudulent transfer claim.
It is imperative to separate business and personal assets at all times. Any business entity like an LLC or a corporation is strictly intended to act as such. This means an individual is not allowed to use a business entity as a place to stash away their finances. The reason for this is because money will be more visible to creditors when it is placed within a business entity compared to putting it into a trust.
Remember that setting up an asset protection plan is a simple process when you have legal counsel by your side. The best method to protect one's personal assets is to store them in a trust. Assets that are part of a trust are much easier to defend because of the legal wall that is there in favor of the asset holder.
A good lawyer can effectively manage and balance the necessary issues involved with an asset protection plan. This balancing act should protect a client and give the client a little more control over his or her assets. In situations where a client has a bit too much control over his or her assets, then creditors can claim that a debtor and the structure of the asset protection plan are essentially one in the same. This immediately puts a client's assets at risk.
There is an idea that asset protection plans are so formidable that a plaintiff would not even try to challenge one. That is not a truth that can be depended on though. You can't depend on an asset protection plan to cover the cost of legal fee's if there is a lawsuit that needs to be defended against.
The insurance is what is there to cover fee's is someone gets sued. That coverage is in place so that if one gets sued, the insurance company will pay for the defense as well as cover the cost of the settlement, if one is awarded. Insurance will also be what a debtor can rely on to get through a fraudulent transfer claim.
It is imperative to separate business and personal assets at all times. Any business entity like an LLC or a corporation is strictly intended to act as such. This means an individual is not allowed to use a business entity as a place to stash away their finances. The reason for this is because money will be more visible to creditors when it is placed within a business entity compared to putting it into a trust.
Remember that setting up an asset protection plan is a simple process when you have legal counsel by your side. The best method to protect one's personal assets is to store them in a trust. Assets that are part of a trust are much easier to defend because of the legal wall that is there in favor of the asset holder.
A good lawyer can effectively manage and balance the necessary issues involved with an asset protection plan. This balancing act should protect a client and give the client a little more control over his or her assets. In situations where a client has a bit too much control over his or her assets, then creditors can claim that a debtor and the structure of the asset protection plan are essentially one in the same. This immediately puts a client's assets at risk.
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Asset protection is best when done through a well thought out estate plan. A decent trust attorney is helpful for maximum protection.
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