What is involved in asset protection?
Asset protection planning involves figuring out and applying a lawful series of techniques that protect a person's assets from future creditor claims. These techniques are designed to deter potential creditors from going after a person's savings, property, personal items, or other assets. They are also meant to frustrate creditors in the event they do try to collect from these resources, generally by making it difficult or impossible for future creditors to grab hold of assets or collect judgments.
The Asset Protection Plan - Trusts, Partnerships & Off-Shore Accounts
In cases where significant sums are involved, an asset protection plan often includes setting up a series of trusts, partnerships and/or off-shore entities to hold legal title. A future creditor who recognizes how difficult it would be to collect on any judgment award, might decide it makes little sense to pursue a claim, or be willing to settle for pennies on the dollar.
Asset Protection vs. Fraud
There is a fine line between legal asset protection planning and fraudulent actions to avoid creditors, which can be considered criminal. It is essential to have an attorney oversee and help with the process in order to avoid crossing that line into a criminal action with serious consequences.
Asset Protection Scams - Be Cautious
Anyone involved in asset protection planning should beware of some financial operators, sometimes posing as foreign trust companies, that market service packages claiming to securely protect assets. Some of them are criminal enterprises that will steal a person's assets. Some are fast buck artists that will offer no protection. Some will subject their "customers" to serious criminal charges. Many will do all three. It is crucial to consult an estate planning or financial professional before going ahead with an asset protection plan.