Almost everyone has assets. An asset represents anything of value that can be converted into cash. For many people, an asset comes in the form of cash itself, as well as personal property, a home, a vehicle, and investments, such as stocks and bonds.
Possessing assets is part of life and part of growing your wealth. However, possessing assets also makes you vulnerable to losing them. If you lose a lawsuit, creditors may come after your assets to seize them as part of what you owe. You may be able to protect your assets from these types of situations through asset protection planning.
Asset protection planning is a type of wealth management service that includes strategies for protecting you and your property against creditors. This can help you live how you wish to live now while continuing to save for your future. However, before you talk to someone about asset protection, there are a few important things we think you should know now:
1. Asset protection is a legal practice
Asset protection should not be confused with tax-dodging or defrauding creditors. These are illegal practices punishable by the law. Instead, asset protection is the practice of managing your wealth and assets in a way that can help protect you from losing assets as collateral in a lawsuit won against you.
2. Asset protection is as beneficial for people as it is for businesses
Many people associate asset protection with small-business owners. It helps small-business owners keep their business assets separate from their personal assets, which can protect their personal assets from any liability to creditors in the event of a lawsuit involving the business.
However, you do not need to be a business owner to benefit from asset protection. You never know when you may be involved in a lawsuit. A divorce or a motor vehicle accident are a couple of examples of common types of lawsuits someone might face at some point in their lives.
3. The best time to plan for asset protection is before a claim arises
Starting your asset protection planning after you have a lawsuit brought to your door is like putting on a seat belt after having an accident rather than when you start driving. It is too late.
Transfers of assets after a claim arises may be viewed as fraudulent and subject to penalty and punishment by the law. However, by planning ahead of time before a lawsuit arises, you are more like a person who buckles up before driving; you are more prepared and are acting within legal boundaries.
Talk to a ProVise CFP® professional about asset protection
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about asset protection? Contact ProVise today to schedule a complimentary consultation.