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Estate planning generally encompasses wills and trusts, which protect your heirs and your assets on your death. Another area of financial planning is asset protection planning, which are legal methods to safeguard your assets against lawsuits or other types of seizures. Asset protection planning keeps your wealth protected without using illegal practices, such as bankruptcy fraud or tax evasion. Although asset protection trusts are not allowed in every jurisdiction in the United States, they can be a valuable method to make sure that your wealth isn’t targeted.
Who Needs an Asset Protection Trust?
Asset protection trusts and other types of planning are used by individuals in high risk occupations that might be sued. A doctor, for instance, may want asset protection planning to ensure that the family home isn’t targeted in a lawsuit. Some people use asset protection planning as a prenuptial agreement. Having your assets in a trust before you get married can keep those assets out of a divorce settlement. Sometimes, there are tax reasons to establish an asset protection trust.
Who Can Help You Create an Asset Protection Plan?
Estate planning attorneys are typically involved in creating asset protection planning. When dealing with an asset protection trust, the attorney should have a good knowledge of bankruptcy law and business law. It’s just as important to understand taxation and creditor laws as it is to understand probate and family law when creating asset protection trusts. Asset protection planning applies to your current assets that you are still using and enjoying. Your death may be years away.
Do You Need Asset Protection Planning?
Only you and your estate planning attorney can really determine whether asset protection planning is right for you. Asset protection planning is designed to guard against particular risks or liabilities. A real estate developer has a higher risk of losing assets than a salesperson. Often, a good asset protection plan deters litigation against the assets in trust. This can level the playing field for the person with an asset protection plan.
Estate Planning Tools That Work
A good asset protection plan doesn’t leave the client at risk of losing assets. Asset protection planning must be within the law, because the asset protection plan will backfire when it evades taxes or hides assets. Protected assets are secure. Hidden assets are vulnerable to being found. Discuss your estate planning concerns with an estate planning lawyer in Gilbert, AZ to learn more about how to legally protect yourself.
Thanks to Citadel Law Firm for their insight into estate planning and asset protection.