Would You Benefit from Asset Protection Planning?

Estate planning is a way to transfer your assets to your heirs on your death. There are many ways to make sure that your wishes are carried out after you die, usually in the form of a will or trust. In many estate plans, you may also include documents that let another take care of your assets in case you become incapacitated in some way. A new trend in estate planning is asset protection. Learn more about asset protection planning and whether your estate might benefit.

What Is Asset Protection Planning?

Asset protection planning is using legal strategies to protect your assets against creditors, divorce, judgments, and lawsuits while you are still living. It’s not about hiding assets or trying to be deceitful. Asset protection planning uses lawful techniques to make sure that you aren’t vulnerable to lawsuits or creditors.

Who Needs Asset Protection Planning?

The people who consider asset protection planning are those who stand to lose a lot in a judgment. You should first look at the value of your assets. The more wealth you have, the more you stand to lose. Some of your assets may be naturally protected, such as your 401k probably won’t be affected in a lawsuit. Your home, up to a certain value called the homestead exemption, is usually protected. Any equity above the homestead exemption is at risk in a lawsuit or judgment.

Next, you need to consider your exposure to lawsuits, as the lawyers at Cohen & Cohen can explain. Certain occupations, doctors, and general contractors may face more lawsuits than other professions. You need to ask yourself how likely you are to face a lawsuit, based on your situation. Could someone feign an injury on your property and sue? Is it likely that an ex-employee could sue you for sexual harassment? When you have more assets, a lawyer is more likely to find you as a target.

Discuss Asset Protection Planning with an Experienced Lawyer

As part of your estate planning, discuss your asset protection planning with a lawyer. Asset protection planning protects what you have accumulated in your life. It’s no longer just for millionaires. Make sure to find a lawyer who understands all the implications of asset protection planning. When asset protection planning isn’t done according to the law, you won’t get the protection. Your attorney needs to understand estate planning, bankruptcy, tax laws, and more to be successful. Contact an asset protection planning lawyer who can help you take the best steps to protect your assets.