subject: Asset Protection Planning [print this page] In the past decade, several people were questioning asset protection planning. Some people even said that it was unethical to follow any strategy to protect assets. Later, views were changed and everyone now looks for legitimate ways to protect assets. Asset protection planning is nothing but a series of legal steps that are required to protect the assets from the claims that would be made by future creditors. The techniques involved in planning asset protection detain your creditors from running behind your assets. They may be either frustrated by the cost involved in grabbing your assets or forced to make very little from your assets even if they catch hold of some information.
When you have valuable assets, you must definitely take steps to plan for asset protection. You may be advised to follow anyone of the technique that requires formation of trusts, partnerships or offshore entities. The legal title of your assets will not be under your legal name. Hence, the creditors can't take over the assets that are not under your name. The future creditor who wishes to sue you should find that it makes little or no sense to run behind your assets. Some people may suggest you actions to defraud the creditors which are against the law. Hence, you should find proper assistance to help you with protecting your assets legally.
The asset protection planning must be complete and proper. There are cases in which asset protection planning failed completely and the asset owners had to give up all their assets completely. Because of these examples, several people are now questioning about planning for asset protection. If protection of assets is carefully planned and executed, creditors will be disallowed from getting access to the assets. The efficiency of asset protection depends on the efficiency of planning. In general, planning is done based on the net worth of the asset owner, goals of the owner, nature of assets and laws related to specific assets.
The actual goal of asset protection planning may differ with different assets. At the end, the plan must be user friendly. The asset owner must not find it difficult to execute the plan. These plans come to rescue of assets during times of lawsuits. The lawsuits create mental stress for the asset owner and if the plan is too difficult to understand and execute, it will fail in protecting the assets. Even though the plan is strong enough, it must be flexible to accommodate changes that may be needed during times of litigation.
When it comes to asset protection planning, there is no single technique or tool that wins all the time. Several strategies have to be followed and plan has to be formed only after considering all the possibilities for the asset owner. The plan protects the assets from being affected by lawsuits. Sometimes, the plan may help the owner to reduce taxes. At the same time, no legal plan can help any asset owner to completely forgo paying of taxes. A legitimate plan should not take steps to hide the assets in an attempt to ensure privacy.
