For those with tight credit who are conscious of the ever-fluctuating economy, thinking about how to protect one’s personal assets is a hot topic that many should pay more attention to. Some people might be wondering what exactly protection of assets is, and what you need to do to protect your assets.
Asset protection is the means by which you are able to keep your property safe in the event that you find yourself in a lawsuit of any kind. In the event that you lose a lawsuit and are responsible for paying back damages, having your assets in a protected state will prevent you from losing your assets as a means to pay for the lawsuit. Lawsuits can range from negligent acts, foreclosure, and more.
In order to have your assets in a protected position, should the unfortunate arise, you are required to be proactive and move all assets that are subject to creditors’ claims (nonexempt assets), and reposition them as assets that are out of the reach of creditors’ call-exempt assets. This is achieved through planning protection of assets.
If you are in the early stages of a lawsuit, it is too late to consider protection planning. This is because each state has laws in place that protect a judgment creditor against people who try to move assets to hinder, delay, or defraud a creditor. The best way to protect your assets is to begin protection planning long before there is any inclination of a lawsuit.
When thinking about protecting your assets, there are two goals that play an important role:
- Short-term and long-term financial goals
- Estate-planning goals
When taking the time to look at your financial goals, both long-term and short-term, you’ll learn about the required finances to continue living the lifestyle that you are currently used to, current and future sources of income, how much money will be required for you to comfortably retire, and how much will be left in your estate for your heirs to inherit after you pass on.
After taking the time to go through your financial goals, you’ll end up with a detailed financial plan of how your finances are set up, and what you can protect. A detailed financial plan will give you an idea of what assets are exempt from potential creditors and which ones are not, and give you the opportunity to reposition any assets that are nonexempt to exempt status.
Once you’ve taken the time to integrate your financial goals with your estate planning, and have repositioned your assets to be protected from potential creditors, you will have an established protection plan in place. Having a protection plan in place prior to any unforeseen lawsuits will prove to be beneficial when you can negotiate a quick settlement, rather than risking losing all that you have worked hard for.
Having professional services at Silver Shield Services will help you make calculated decisions, and can prove to be a wise investment when your assets are protected. Contact us today to learn more about how we can help you with asset protection of your investments, and make sound decisions for your future.