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Last Updated on December 28, 2020 by Work In My Pajamas
If you have assets, they need protection. Even if you’ve never heard about asset protection before, you can start taking advantage of it today. Many people don’t even suspect how many dangers their assets are in.
You don’t have to make a mistake to become eligible for bankruptcy. All it takes is just a little bad luck, which no one is insured against. The only way to keep your assets in place is to think about protection timely.
It doesn’t matter whether your net worth is $10,000 or $10 million. Here are a few ways how your hard-earned assets can tell you goodbye.
In This Post:
1. Litigation
How often do you hear the words “sue” or “lawsuit” in the United States? Probably more than in any other developed country. However, Europe is not the far behind. People and companies are suing each other left and right. Do you think you are an exception?
Anyone can sue you at any time and for absolutely any reason. With a little bad luck, you can lose a seemingly simple lawsuit. Even if you don’t, you may waste a substantial amount of money on legal expenses.
An unexpected lawsuit with an unfavorable outcome is the top reason why you should think about asset protection.
2. Divorce
When love and passion are gone, the money becomes a cause of a dispute. In the United States, about 40% to 50% of marriages end in divorce. The majority of people are so blinded by feelings that they don’t realize going into marriage how badly it could end. Planning for such a problem doesn’t usually seem reasonable at the time.
Ex-spouses and children have the rights to the majority of a person’s finances unless otherwise planned for. It’s possible to avoid such a problem by taking the right asset protection steps ahead of time
3. Creditors
Asset protection planning is highly important when you want to keep your money away from future creditors. Asset protection should be done ahead of time. Because when the creditors are already after you, trying to hide your assets is simply illegal. Avoiding financial obligation can lead to unfortunate consequences.
However, if you manage to think ahead and do some planning before the creditors appear, if they do, you can keep your assets safe from them. Legally.
Types Of Asset Protection Planning
When it comes to asset protection, it’s always better to get professional advice on the matter. Numerous nuances exist, which can make the process tough and time-consuming. However, it’s better to arrange asset protection on your own rather than not to do anything at all.
1. Domestic Asset Protection Planning
Numerous domestic asset-planning approaches exist. They start with simple things such as increasing your liability insurance and more complex approaches such as asset protection trusts. Domestic asset protection trusts (DAPTs) are fairly new in the United States. However, they do an excellent job helping property owners, small businesses, and doctors protect themselves from internal liability.
Domestic asset protection also includes retirement planning. Retirement accounts can keep your money safe until you reach a certain age regardless of the litigation, creditor problems, and divorces.
2. Offshore Asset Protection Planning
International asset protection planning is considered highly effective for businesses. It involves setting up legal entities and accounts offshore. Many safe jurisdictions exist around the world, which makes keeping your assets offshore easy and 100% legal.
The best way to keep your assets safe is to move them away from your domestic jurisdiction. U.S. judges have no power over money located offshore. Offshore trusts are considered to be some of the most bulletproof ways to keep the assets intact.
You can diversify your holdings by creating different legal statues, such as trusts, corporations, LLCs, and the like. The most investor-friendly laws can be found in offshore jurisdictions.
When you are taking advantage of offshore asset protection planning strategies, it’s highly important to follow all taxation requirements.
The Worst Mistake You Could Make
The worst mistake a person or a business owner could make is to put the asset protection plans off. You never know when the disaster could strike. It could be next year or tomorrow. If you have assets, protect them now.
