subject: Getting The Details On Protection Of Property [print this page] The sudden spurt of litigation has an interesting consequence the rise in popularity in the use of asset protection techniques. While you may have heard about it, very few have a clear idea in this regard. Protection of your property from liability claims is the aim of these techniques.
Here are the answers to the common questions pertaining to such protection.
What is it - Effective use of estate and business planning to keep your assets safe from potential creditors and litigants is termed asset protection.
Who needs it - Everyone owning any property needs it whether it is worth $1, 00,000 or $10,000,000. However, if you own a business or are in a high-risk' job, e.g. medical practitioner, pilot, etc, it is essential for you.
What strategies are available - Various strategies are available; however, you need to consider what you want to protect and what level you want before you choose any strategies. Some common tools are limited liability companies, offshore trusts, etc.
How does the plan work - The strategies aim at transferring the legal title of the property. It is difficult, and expensive, to access these assets. Therefore, creditors and litigants do not feel the urge to sue you and take away your property.
When do you plan - This protection planning is most effective if you can do it before you face any claims or sign any creditor agreement. However, you may consider this any time.
What are the tax consequences - If you take help from a qualified and experienced asset protection specialist, minimal tax consequences is possible.
Why opt for it when you have insurance coverage - In most cases, your insurance does not cover certain areas like punitive damages. Moreover, the claims most often exceed your insurance limit.
Why choose it when you can transfer assets to your relations - If there is a claim, the court may consider it a fraudulent transfer. If there isn't, your property becomes susceptible to creditors and litigants claiming against your relation.
What happens if you choose to deposit wealth in an offshore account - The creditor/litigant's attorney can track these if it is a legal account. The court can order you to bring back the assets.
Is it expensive? If you take help from a specialist with thorough knowledge of the laws, it does not involve high expenses. However, the cost depends on the what' and how' the assets you want to protect and the level of protection.
