subject: Mistakes to Avoid When Planning Protection of Assets [print this page] Mistakes to Avoid When Planning Protection of Assets
Do you think that your assets are safe? If you think that just creating a will or trust is all that you need to safeguard your assets, you are in for a surprise. A will only comes into effect after the death of the maker. A trust does not suffice in case you face a liability claim or a creditor you are unable to pay off.
What do you do to protect your property? How do you ensure it is legal? The convenient way is to opt for an asset protection plan customized to suit your specific needs. Various pitfalls may hamper your planning. This is why you need the advice and guidance of a competent legal practitioner.
What are the most common mistakes people commit in this regard? Here is a quick look.
Delaying the plan is perhaps the most common problem. If you think you are just not wealthy enough to opt for this, consider the facts. Suppose you have assets worth $50,000. It would be much more difficult for you to tackle a liability suit worth $25,000 than for someone with a net worth of $2 million.
Thinking that insurance would cover all liability is also another misconception. Often liability claims scale up to millions, exceeding your insurance coverage. In such a situation, the plaintiff's lawyer is sure to come after your assets to settle the claim.
Thinking that one strategy would work for all circumstances is not a very intelligent idea either. If you think that replicating your friend's asset protection strategy would be sufficient, you need to think again. Your specific type of property and circumstances play a significant role in formulating the plan.
Disregarding the laws would also mean hassles later. While protecting your assets using legal means is always a possibility, doing so without an in-depth understanding of the federal and state laws may lead to legal disputes.
Trying to do it on your own by hiding your assets or transferring them to someone else also do not work quite effectively. Hiding your assets may make them difficult to discover, but not impossible. Moreover, if you transfer your assets after the filing of a suit against you, the court may deem this as a fraudulent transfer.
Planning standard protection for your assets, be it liquid ones or business or real estate, requires help from legal practitioners. You need qualified and experienced attorneys specializing in this planning for handling the task.
