Asset Protection

Organizing assets in advance to reduce the risks to which they might otherwise be subject is an increasingly popular practice. Typically, asset protection involves the transfer of assets from an unprotected form of ownership, such as direct individual ownership, to a protected one. Limited partnerships, domestic and/or offshore liability companies, charitable remainder trusts, irrevocable life insurance trusts, domestic asset protection trusts and/or offshore asset protection trusts are all good examples of the latter.

Two factors help ensure the ultimate success of asset protection. First, asset protection must be preemptive. If there is a lawsuit already in the works, it is usually too late to reorganize. State laws frown upon individuals who transfer their assets out of their names with the intent to hinder, delay, or defraud creditors.

And second, asset protection must be part of a comprehensive estate plan, one that integrates estate and financial planning with long-term strategic goals.