Reaching Your Goals, Protecting Your Interests
Proper asset protection planning can safeguard your hard-earned assets should you face legal trouble down the road. An essential step in financial planning, too many Californians overlook the importance of asset protection planning because they don't consider what could happen if someone were to go after those assets in court. Asset protection planning is essential if you have significant real estate or business interests or are in a high-liability line of work. But in reality, no one can afford to overlook the importance of asset protection planning, so here are our top tips for asset protection planning everyone should consider.
Assess Your Assets
Creditors can only go after nonexempt assets. Exempt assets are immune from creditor claims. The goal of asset protection planning is to reclassify your assets as nonexempt—to the extent that you can—to protect them from creditors and court judgments.
Focus on Prevention
Don't wait until you are facing a court judgment to embark on asset protection planning. The court will typically see through your attempts to shield assets and view the transfer as fraudulent. The court can even order those fraudulent transfers be reversed no matter your intent for the transfer. That said; think of asset protection planning as a preventative measure, not a reactionary measure.
Keep Your Goals in Mind
Sound asset protection planning starts with assessing your financial goals and how you can reach them. As a component of a comprehensive estate plan, an asset protection plan can help you achieve those goals even in the face of risks. Always work with a California estate planning attorney when planning to protect your assets. An estate planning attorney can explore all your options with you and help you establish an estate and asset protection plan that is robust and legally sound.
Explore life insurance policies and annuities, which are two investment types that are typically protected from creditors. An estate planning attorney can help you incorporate these into your overall estate plan in a way that makes sense for your financial goals. Certain trusts can also be effective asset protection tools but always work with an attorney to decide what method of protection makes the most sense for you.
Review and Revise Frequently
Regularly update your asset protection plan. Failing to do so can leave you vulnerable should your interests or liabilities change. Just like estate planning, asset protection planning should be revisited frequently and revised as needed.
Let Go of Some Control
One of the biggest traps people fall into when asset protection planning is trying to maintain too much control over their assets. This is understandable but also makes your assets more susceptible to creditors and judgments. Generally speaking, the more control you have over an asset, the easier it is for a creditor to make a claim against it.
Don't Overdo It
Strike a balance when protecting your assets. If you go overboard in asset protection, it may appear as if it was done in bad faith or in an attempt to defraud creditors. This underlines the importance of early and advanced planning.
Work With a Skilled Attorney
Asset protection planning is the ounce of prevention that pays significant returns. Again, the time to start asset protection planning is not when you're already facing a lawsuit. If you consider all the threats to your financial viability you could meet down the road from creditors and judgments, you can begin to see the benefits of asset protection planning. Start with reading through these top tips to get a feel for what protections this type of planning can provide. Next, consult with a California estate planning attorney who can audit your asset protection planning strategy to ensure your hard-earned assets are protected as best they can. An estate planning attorney can help you develop a comprehensive estate plan that protects your assets now and in the future.
Do you need help protecting your assets? Fresno area estate planning attorney Christopher Martens can help you carefully plan your estate to preserve wealth and protect your loved ones' interests. Attorney Christopher Martens has the skills and knowledge needed to help you ensure your wishes are carried out properly. Serving the Visalia and Fresno areas, The Law Offices of Christopher Martens can provide strategic estate planning guidance. Call our office at 559-967-7386 or email us at [email protected] for a free consultation.