The Need For Asset Protection Planning

By Jaclyn Hurley


In property protection, several legal techniques and statutory laws are used to protect assets of individuals and businesses from monetary judgements by financial institutions. Property protection planning, on the other hand, is used to protect property from creditors with strict observation of tax and concealment policies. It is through this program of asset protection planning that a person can be protected from huge debts that would be incurred from facing the creditors.

Some of the techniques used in planning include; retitling various properties, moving funds to irrevocable trusts, maximizing IRAs contributions, using limited liability companies, or using the limited partnership of the family. In order to develop a proper strategy of safeguarding assets an attorney should be hired. His/her duties will involve discussing both short term and long term financial objectives of the program and also guide the client through the entire process.

Arguably, taking up the plan cannot be operational if there is a pending lawsuit. Otherwise, the court cannot defraud the creditors if there is a warrant for arrest. This implies that the plan should be prepared before the warrant is issued. For example, if a person attempts to evade the creditors by transferring the assets, the court is likely to reverse the transaction.

The planning aims at three major goals-short term, long term and particular goals of estate planning. Analysis of the short and long term financial goals of the project enables a person to plan the current and future income sources. Additionally, it also helps budgeting for the retirement needs and the amount of money to be passed to heirs after death.

The next step involves improvising a sound financial plan and reviewing all the available assets in order to protect them from creditors. In case they are not exempted from creditors, the client and attorney can opt for prepositioning them. Similarly, it is also used for the preposition of property that a person may be intending to acquire in the future.

The next step involves calculating all the properties owned by the firm or person. After which, an estate plan is developed and used for catering for the client in case of any eventuality. Additionally, the plans are also used to identify the heir to the family and the assets owned by the client.

There are some advanced planning techniques for estates which are used to incorporate an asset protection plan with the estate plan. The two major firms used for this program are the irrevocable trusts and family liability companies. Both of them are used in taking care of the person, the family and other beneficiaries.

Normally, asset protection plan is put in place after harmonizing financial objectives with the estate plan. At the same time, all properties to be protected should either be positioned or prepositioned. Finally, the client can negotiate with the creditors about all the costs to be incurred. This is therefore one of the best measures that one can take in-order to protect themselves against creditors. The good thing about it is that it is a legal process and can be supported by the courts of law.




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