What is Asset Protection?

Professional Writing Sample - Written for a sister site of Trustmakers.com

Asset Protection is the practice of taking very specialized steps to minimize or eliminate the risk of creditors or other claimants from being able to discover and acquire someone’s assets. A claimant cannot take money or other valuables if their target does not retain ownership of those valuables. An Asset Protection professional devices a plan to reduce a client’s ownership of their assets, while maintaining the client’s control over these very same assets.

Any plan for asset protecting should be implemented when the client’s financial security is stable. It is important to protect assets before a lawsuit occurs and not during the threat. It is against the law to fraudulently convey or transfer assets to avoid a judgment award. Fraudulent transfers can be punishable by a criminal charge.

The best asset protection practitioners have spent the better part of a lifetime developing systems and technology to build security around their client’s assets. These professional asset protectors are familiar with IRS tax code, U.S. laws, and international banking procedures. This allows them to craft individual plans that protect assets within the boundaries of the law.

Asset Protection is not a tax shelter. The US government requires all of its citizens to report all worldwide income and comply with all tax demands.

An important tool in asset protecting is the Offshore Trust. These trusts have evolved from Common Law to protect the assets of debtors from the courts by removing legal ownership from the debtor, while the debtor maintains control and beneficial enjoyment. A claimant cannot take what a debtor does not own.

The use of an Offshore Trust, also known as a Foreign Asset Protection Trust, can be an advantageous legal tool to secure and protect assets such as real estate, bank accounts, company assets, annuities, dividends, stock portfolios, furniture, artwork, precious jewels, and estate valuables.

Some of the other tools of Asset Protection include creating corporations, buying insurance, and equity stripping the personal residence. Asset Protection specialists use a range of these tools to create an individualized plan that will protect the financial needs of their clients.

by Melody Platz
February 2008