Understanding “Asset Protection”

First, to understand the importance of asset protection, we must understand the definition. “Asset protection” is generally legal structuring to protect and preserve one’s assets (anything of value that can be transmuted to cash) from vulnerability to lawsuits targeting an individual or entity. The most basic form of “asset protection” would be placing a business interest, such as a rental property, into an LLC to shield the individual owner’s other assets from legal liability. Common basic methods of protecting one’s assets include asset protection trusts, underlying LLC’s, and accounts-receivable financing. 

Asset protection trusts are a form of trust that have the highest amount of protection from lawsuits, judgments against your estate, and creditors. This is a self-settled trust where a grantor is allowed access to trust account funds and designated as a permissible beneficiary. 

Many clients like to retain control over the assets they want to protect. So rather than transfer assets directly into the trust and cede control to the trustee, the trust can create an underlying company that if created correctly can allow management of the assets. 

Asset protection planning secures your valued assets throughout your lifetime, preserving your legacy. Learn more about the complex nuances of asset protection here.

We create both simple and complex asset protection plans for clients from all walks of life. Contact us today at (858) 755-6672 or by emailing us here to schedule your in-person or digital consultation.