What Is Asset Protection and Why Do I Need It?
When lawyers talk about asset protection, we are not talking about protecting your assets from a natural disaster like fire, storm, flood. or earthquake. Insurance protects you from those natural disasters. When we lawyers speak of asset protection, we are talking about protecting your assets from unnatural disasters. And there is only one kind of unnatural disaster: a lawsuit.
There is nothing natural about a lawsuit. It is one of the most complex, confounding and destructive creations of human civilization. Do you think you have accumulated some wealth? All of it can be swept away with a single lawsuit.
This being said, it is clear that the first step in any program of asset protection is avoiding becoming a defendant in a lawsuit. For guidance on avoiding lawsuits, see the suggestions under the heading: Gene DuBose’s Four Rules to Avoid Becoming a Defendant.
There are, however, things you can do with your assets to protect them if a lawsuit occurs. But it is vitally important that you take your asset protection steps prior to the filing of a lawsuit or even the vaguest suspicion that a lawsuit might be filed against you. If you transfer assets to protect them afterwards, a judge will be able to undo all you have done.
The whole subject of asset protection is too complex to discuss in this brief note, and your solutions will vary depending on why you want to protect the assets. It is to retire on those assets? give a legacy to your children? Support a handicapped child? Insure that your business continues so that employees remain employed? It will also vary depending on what kind of assets you have. Are your assets primarily real estate? Stock? Cash? Operating equipment for your factory? Your collection of fine art? Your solution will depend on these variables and many other factors. Take advantage of my $100 consultation to come talk about asset protection for your assets.