Protecting your assets is a sub-set of business and estate planning. All estate plans should integrate a protection plan to maintain custody of your assets when unforeseen situations arise in the future. It is essential to work with the right legal team to help you properly organize assets and safeguard them against potential risks they may otherwise be subject to. These items generally include materials such as rental or real estate properties, commercial properties, business materials such as tools and equipment, motor vehicles, individually owned bank accounts, stocks and bonds, and many more items. Although there are many potential risks, this article addresses three common situations where protection is needed.

3 common areas of asset protection

1. Protecting assets from a lawsuit. One of the most concerning areas for a business or a company owner is what they should do if they ever get sued by an individual.
2. Protecting your income from being overly taxed. A common concern is if all tax deductions are being used in the correct way that your company is legally eligible for.
3. Finally, how are you going to protect your retirement funds from market risks and the potential ups and downs that can come from running a business?

Understanding assets protection strategies

It is vital that companies work with professional entities that have tried and tested strategies when it comes to asset protection and estate planning. Although there is no such thing as a one-size-fits-all approach, there are common strategies that can be discussed with a legal professional. This includes creating elaborate barriers that add layers of protection against opposi8ng parties that may be looking to pursue them as part of legal action. This can mean planning your assets in a business entity, maintaining the right insurance plans for your needs, and placing funds in trust accounts.

It is always a good idea to prepare for the worst while things are going well. By creating and implementing an asset protection strategy early you can ensure that plans are properly implemented and executed. If you live or run a business in Utah, California, New York, Florida or Tennessee consider calling the professionals at Bowen Law Professional Group to speak with a legal professional and learn more about what we can do for you.

Protecting your assets is best handled in preparation for circumstances, not as a quick response to them. It is important to remember that these steps should be taken before any legal action, such as a lawsuit, has been filed.  Below are several common ways that your personal or primary home can be protected should a legal cause ever happen.

Homestead Exemption

Almost every state has statutes that protect a certain amount of value of your home from creditors or during bankruptcy.  Essentially if someone such as a creditor files a lawsuit against a respondent, the resulting case may require the sale of the home.  The creditor will only get the remaining balance after selling fees, the mortgage balance and the homestead exemption amount.  If homeowners want to take advantage of this exemption, they should contact us.

Tenancy by the Entirety

Certain states offer unique protection called “tenancy by the entirety.”  Essentially this protects the home if one spouse is sued for reasons that have nothing to do with the other spouse.  Essentially this law asserts that it is not fair for one spouse to lose their home because of the actions of the other.  Even if your state does not have this law in the books you can accomplish the same result in the other ways described herein.

Create a Domestic Asset Protection Trust

This is a self-settled trust created and protected under certain state statutes.  In general, these types of trusts are becoming more accepted each year as new states adopt some form of DAPT trust laws.  This type of trust can provide certain protections to homes, farms, vacation homes or beach houses that you plan on keeping for life or a very long time.  In most states, the longer a property is held in a DAPT, the more it will be protected in the future.

Speak with a professional today

There are many ways in which your personal and business assets can be protected.  Perhaps you run a business where you must take financial risks.  Putting the house in your low-risk spouse’s name, for example, could help protect your home should legal concerns arise.  You may also consider getting an “Umbrella Risk” insurance policy that protects you from a wide variety of situations.  These Asset Protection techniques should be components in your Asset Protection System™.  Remember that it is wisest to plan for a storm while the skies above are blue.