add share buttons

What Is Asset Protection?

Asset protection is the act of protecting your assets from creditors or other litigants. Pre-litigation planning is a better term to avoid lawsuits and promote settlements. To protect your assets and minimize your time dealing with an attack, the bottom line is to make your life easier. The estate planning attorneys in Los Angeles can help you in protecting your assets. 

It is surprising that written on the topic of asset protection. The subject is not covered in any legal casebooks, classes in law school, or books for the curious mind. The term “asset protection” is not found in any state statutes. 

The subject is rarely covered in law digests. This course was one day and was meant to assist attorneys in “discovering assets” of their adversaries. Although the course was informative and interesting, it was not taught by an expert in debtor-creditor litigation. Theoretical asset protection is not always compatible with real-world asset protection. 

Can you imagine someone planning 20 years to avoid a frivolous suit? To obscure their title in the event of an attack, someone might sell an option on real estate. To give the appearance of zero equity, an individual might intentionally over-burden their investments. A plan that can be approved and reviewed by a judge in a court of law is the best way to protect your assets (assuming you know the right questions to ask).

Our legal system is so unpredictable, however, that asset protection should not be left to chance for those with substantial assets and money. Boilerplate documents won’t suffice for an effective asset protection plan. If you are unable to find professional help, it is worth seeking it. Solid planning is only possible with well-written documentation.

Protecting yourself is about three things. Your income, assets, and physical well-being are the first areas to be concerned. This article has been about someone taking your income through the unauthorized use of your credit (i.e. Identity Theft. This can prevent you from buying more assets, or depriving your family of their lifestyle.

You can also sue to attack your income and assets simultaneously. In the next five years, one in 15 people will be sued. Every year, bogus creditors and phony lawsuits, as well as the IRS, steal income and assets from people just like you because we fail adequately to protect our assets.

Your first line of defense is to adopt a philosophy/attitude. It is important to keep your profile low, not brag about your holdings, and purchase proper insurance (we recommend that students buy both liability insurance and an umbrella policy). These actions will not guarantee you won’t be sued and lose your entire estate to a quick-buck artist and his attorney it can cost a lot to defend yourself against a frivolous suit.