Asset protection is a set of legal techniques by which one can protect his or her assets and belongings against lawsuits.
The rationale of asset protection is to set aside and shield your liabilities from precious assets to the greatest extent allowed by law, so as to diminish your debtor's profile and amenability to a lawsuit. It also includes conducting a legal asset freeze by shifting precious assets to other family members, at a time when you have no existing or expected claims in the near future.
Thus, if you are relatively debt free today, then the asset protection planning will advice you to shift your valuable assets such as house property in the name of your family members. Asset protection planning is also, to a certain extent, pre-litigation and pre-bankruptcy planning that seeks to maximize the use of exemptions permissible by the state and federal authorities.
Asset protection planning is not meant to cheat rightful creditors, ex-spouses, business partners, and investors. In an eventuality, if one does resort to such a measure in court, he or she should be prepared to look forward to very liberal pro-creditor rulings.
It is basically a technique that ranges from titling property ownership in ways such as joint ownership to the conversion of assets into forms that are exempt from seizure by creditors like a homestead exemption or collateralization of accounts receivable.
Very often, people think that the prime objective of asset protection is to stiff legitimate creditors. On the contrary, good asset protection assumes, to a significant degree, that the target of the litigation will pay up all his debts and not attempt to use the fact of the asset protection planning to unfair advantage. Hence, unlike popular belief, it is not a way to cheat your legitimate creditors.
Asset Protection provides detailed information on Asset Protection, Asset Protection Trusts, Offshore Asset Protection, Asset Protection Strategies and more. Asset Protection is affiliated with Asset Management System .