What Is Asset Protection Planning?
When making the appointment to get your estate documents in order, you may want to do a little research before you go. While you may be familiar with what a will does, there are other documents and tools these attorneys can use that no only prove beneficial to your family after you die, but may help you now.
One of these is asset protection. This type of tool may come in handy during your lifetime if you find yourself facing a judgment that threatens to drain your wealth reserves. When meeting with an estate planning lawyer, it is in your best interest to have your present financial picture in hand, as well as your forecast for growth in the future. Armed with this information, you and your attorney can come up with a plan to keep your money safe moving forward.
Preserve Money in Case of Hardship
As an asset protection plan takes the money you have now, as much as you can spare, and puts it away for the future. Doing this serves a couple of purposes. First, if you ever become the subject of a lawsuit like a personal injury claim or foreclosure, this money cannot be seized or even considered when calculating a settlement. The trick is you have to move the money before a lawsuit is filed. Otherwise, a court can order you to withdraw the money and use it towards the court action.
A Safe Haven for Your Money
Trusts are often established during the estate planning process to keep property for heirs to inherit without having to go through probate. These same tools can be used to shield money from creditors and judgments. Some trusts allow cash and property to be deposited and taken back. Others are locked down and, once established, cannot be changed. The latter is typically what a lawyer who is preparing an asset protection plan may utilize.
Those Most at Risk
While no one’s future financial situation is fully known, some people may be more of a target if they do not set up some protective receptacle for their money. Doctors, anesthesiologists, and the like who may become subjects of medical malpractice lawsuits may want to establish an asset protection plan sooner rather than later. Hedge fund managers and traders may also want to get something in place once their careers begin to take off.
Before making an appointment with an estate planning lawyer, you may want to check to see if they have tax experience. It is a good idea to utilize the services of an attorney, like an estate planning lawyer in Philadelphia, PA, with a background in tax law to set up your asset protection plan. If using a firm, there should be one such attorney on staff who can consult.
Thank you to Klenk Law for their insight into asset protection planning.