What is Creditor & Asset Protection Planning?

The goal for creditor and asset protection planning is to intelligently structure your assets ownership so that Judgment Creditors and other legal entanglements cannot impact your personal and Family Wealth. This is not an estate planning tool limited to those who are super-wealthy! In fact, some might argue that this planning is more important for those who are not super-wealthy.

In this day and age, anyone can be sued. Lawsuits can occur for a variety of reasons, whether it’s due to motor vehicle accidents, credit card debt, bank foreclosures or professional liability. If someone wins a monetary judgment against you, your personal assets will be vulnerable unless you do something to protect them in advance of the liability event.

To keep your assets out of the reach of creditors, you have to move those assets somewhere where creditors cannot touch them.

Asset protection techniques include, but are not limited to, the following:

  1. Maximizing contributions to your retirement accounts;
  2. Moving funds to an irrevocable trust[1]; or
  3. Using limited liability companies or family limited partnerships.

Developing an asset protection plan begins with having a conversation with your estate planning attorney. We routinely discuss our clients’ short and long-term financial goals in order to create an estate plan that will provide creditor, lawsuit and divorce protection from them and their families.

Please note that asset protection planning does not work after you are sued. This means you must be proactive and have this planning completed prior to being sued.

Under the law, you cannot defraud your current creditors. This prevents you from transferring assets out of your creditors’ reach if you have been sued or if you know you’re going to be sued. The courts can reverse fraudulent transfers and subject you to additional penalties.

That is why it is a good idea to put an asset protection plan into place now, before it is too late.

Contact David Frees today at (610) 933–8069 for information regarding sophisticated asset protection.  Mr. Frees also works with a team of lawyers who can help you with corporate and business organizational matters.

David M. Frees, III
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Attorney, Speaker and Author
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