What Is Asset Protection Planning?
Anyone who has assets should protect them if at all possible. One way you can do this is through proper asset protection planning. What is it and how can it help your situation?
Asset Protection Planning 101
Asset protection planning is the process in which you make certain arrangements to keep your assets out of the reach of creditors, divorce settlements and other judgments. There are a number of actions that can be taken to ensure this happens, and your protection plan might encompass several of them. Basically, you’re trying to ensure your assets remain in your own hands, and the right plan will help you achieve that.
How To Get Started
When you’re ready to get started with an asset protection plan, you’ll want to enlist the help of an attorney. You could speak with an estate planning lawyer, a family lawyer, a corporate lawyer or anyone who has experience in asset protection. When you hire an attorney, risks are minimized and you have access to the knowledge required to get your plan started correctly.
The process of asset protection planning will typically include trust agreements that give other individuals at least a portion of control over your assets. This protects it from creditors and establishes ownership of it. While you might still have physical access to the asset, a loved one or other trusted individual has legal control of it.
Some Types of Trusts That Might Be Included in Your Plan
There are two types of asset protection trusts that you might utilize. These include domestic trusts and foreign trusts. Within the realm of domestic trusts, there exist revocable and irrevocable types of trusts.
- Revocable Trusts – With a revocable trust, the individual still has access, which means creditors also still have access. This may not be the best form of protection in some situations.
- Irrevocable Trusts – This is the way you shield your assets from creditors. Irrevocable trusts do have some exceptions, but overall, your assets are protected.
Keep in mind that asset protection plans are taxable. Even in a trust, you have trust liability, so you can’t avoid paying the IRS. If you have some foreign trusts, a judge could require you to repatriate them by way of a court order.
Getting an Attorney on Your Side
If you’re looking for a way to protect your assets, you need to be smart about it. Consider contacting an asset protection lawyer in Schaumburg, IL to assist you. Lawyers from a firm like Bott & Associates, Ltd., could be of assistance.