What is meant by asset protection? We often get this question when we speak with our clients about their estate planning options and what is the best legal options available for a particular scenario. Although this question may imply a simple answer, the answer often is much more involved than you might think. Basically, we are asking how we can protect the assets we have now, or those we gain in the future, from being taken away or subject to claims against us. How we recommend protecting your assets will depend on what liabilities we are concerned with. Are we worried about creditors? Or divorcing spouses? Or business actions? Or just being sued generally? At Priority Law, we provide our advice and consultations for free, and we can go over any or all the asset protection concerns you have in a complimentary meeting. We can even put on our masks and visit you at home if that is easier.
There are a few examples of some common areas our clients are concerned with. Some of our clients have property besides their home property that is used as a rental, used as a cabin, or used for other reasons. If something happens on that property, are the client’s home property or other assets at risk? The short answer is yes; their home could become subject to claims arising from this other property. So how do we protect against this? Insurance is always a good option, and we can even assist our clients in finding a good insurance representative, but insurance may be limited either in its terms or in the amount, so although it is good to have, we recommend legally separating that asset from the client by transferring ownership to some other entity. Now if a claim is made that gets through the insurance, the liability stops at the entity, which is now the owner, rather than the client.
Some of our clients have paid off their home, or mostly paid off their home, and they do not want to subject that home to any legal claims at all. Other clients have some savings, stocks, or other assets that they just want protected no matter what. Utah is one of the few states that offers us the ability to transfer our own assets into a trust that is protected against claims against us individually. This is generally referred to as an asset protection trust, or domestic asset protection trust (domestic referring to the trust being created in the United States or domestically). There are also foreign asset protection trusts that can be used for the same purpose that offer even higher protections and more hurdles for claimants (those making claims) but may not be worth the extra cost or hassle.
Some clients will utilize both strategies and even others that we may go through during our consultation, such as protecting the assets you give to your children from ever becoming part of their estate. This can provide protections for that child so that the assets you give to them are protected from that child’s creditors, the child’s divorcing spouses, or other claims. If you are interested in learning more about what legal options are available to you to protect your assets from potential liabilities, please set up a complimentary meeting with our office and our attorneys can go through all these options (and more) with you.
Asset protection strategies can be very valuable if done correctly. Contact a Priority Law attorney to speak about whether an asset protection plan is right for you.