What is Asset Protection?
Asset protection is a way of protecting an individual’s assets in the event of legal proceedings being brought against the individual. There are a number of reasons why a person may wish to do this. A main factor is to limit the amount of assets that can be recovered if legal proceedings are put in place. Another is to protect how much monetary value is actually placed under one's name. The less money or assets people know you have, the less likely they are to target you for theft or in a court case.
The act of placing your assets into a business entity or trust means that another person cannot gain access to these assets. The assets also cannot be identified as yours by criminals who, on seeing your worth, may try to use identity theft to gain access to your assets. Anyone who has a substantial amount of wealth can find asset protection advantageous. It is particularly helpful to people who work in professions with a propensity towards litigation. Lawyers, doctors and business owners are at higher risk from lawsuits, and asset protection can be a help in the worst eventuality.
Asset protection does not mean that the person is trying to get out of paying if he or she is liable. Those with asset protection are simply making it more difficult for people to target them as easy payouts, which they may perceive them as if they had knowledge of their wealth. The amount of litigation and lawsuits, combined with the size of awards won in these cases, makes asset protection a very important financial option to consider.
There are a many different ways that you can set in motion the process of asset protection. You can place stocks, share and cash into offshore bank accounts. You can invest your money in living trusts or partnerships and companies. The safest forms of asset protection investment are tested ones, which have successfully protected assets from litigation in previous court cases. Use these methods of protection as an example of how you should invest your assets, and you should not get caught out in any eventuality.
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