What is Asset Protection?

Asset protection is a set of legal techniques, and a body of statutory and common law, dealing with protecting assets of individuals and business entities from civil money judgments. The goal of asset protection planning is to insulate assets from claims of creditors without perjury or tax evasion.

 

Asset Protection Strategies:

An Asset-Protection Trust is any form of trust which provides for funds to be held on a discretionary basis. Such trusts are set up to avoid or mitigate the effects of taxation, divorce, and bankruptcy on the beneficiary.

The best asset protection strategies involve legal tools and financial plans developed to shield valuables from lawsuits. This may include forming certain types of trusts and companies and taking advantage of regional laws designed to protect assets. 

Asset protection strategy number one is to use Limited Liability Companies (“LLC”). LLC statutes include provisions that keep a creditor from taking assets of the LLC owner.  An Asset Protection Trust is considered the most powerful tool to protect money from lawsuits. The best Asset Protection Trusts are formed offshore. Avoid holding non-exempt assets in your own name.  Use separate legal devices, such as placing each piece of real estate in a separate LLC.  If you have a rental property, a lawsuit arising from such property does not have a domino effect on others or put at risk the assets of other properties.  Another technique is to avoid ostentatious displays of wealth which can create a target for lawsuits. 

Do not hesitate to contact the attorneys at Tishkoff if you have questions regarding business law or litigation. The attorneys at the Tishkoff, located in downtown Ann Arbor, Michigan, may be reached by phone or email.