Truth About Asset Protection Planning
A Case for Asset Protection / The Rising Tide of Litigation
The ever-rising number of lawsuits being filed and the predatory behavior of businesses that file lawsuits to stifle competition forces us to consider the reality of asset protection. or example, Litigant A sues Client B, for example, forking out over $13 million in legal fees to attack its competitor over a patented product that ended up being worth a mere 10 cents per device. Litigant A spent five times what they ended up settling for. The lawsuit was an attempt to squash a competitor.
Defendants face ever-broadening theories of legal liability and many are sued just because they are perceived to be a deep pocket or easy litigation target.
- What is “Asset Protection”?
- It is perfectly legal, moral and ethical to protect your assets from current and future creditors.
What is the Definition of Asset Protection?
Asset protection is a legal means used to shield personal and business resources from civil judgments. The objective of asset protection is to shield wealth from the demands of creditors without committing perjury or tax evasion.
Asset protection is basic to any and all financial planning. People employ asset protection plans help to protect their hard-earned wealth before or in the presence of a legal threat.
Asset protection planning need not be about evading taxes, secretly shifting assets to family members, or defrauding others.
Why Conventional Asset Protection Often Doesn’t Work
Everyone engages in some form of asset protection plan such as obtaining car insurance, fire insurance, an umbrella policy, malpractice, health, etc. Unfortunately, it is often the case that such insurance increases the chance of a lawsuit instead of decreasing such chances.
Other asset protection devices include the use of corporations and LLCs to separate business liability from personal assets. If properly established and maintained, a corporation may protect personal assets from a business lawsuit.
Properly Done, Asset Protection Plans are Perfectly Moral, Legal and Ethical
Protecting oneself and one’s client is the right thing to do. Done properly, asset protection can be conducted in a legal and ethical fashion and to aid in protecting assets from criminal or fraudulent activity or to engage in tax evasion.