An asset protection is a process which helps us in protecting our assets by a variety of legal schemes. It is a strategic planning, pre-emptive preparation to prevent creditors from obtaining property in the event of a civil judgment.
It does not mean that an individual ignores his liability. It is essential to develop a strategy that how you will protect your asset, when and from whom. To know more about how to protect your asset you can navigate http://www.lawbh.com/estate-planning/.
Here is some important guideline that you need to know before doing asset protection.
1. First of all, you should need to know that who can make a claim on you and for how much.
For example, you entered into a contract with creditors for their services. Now you realise that you can't pay them. You know how much a creditor can claim as you made the contract.
2. Secondly, it is important to know that what assets you own that is vulnerable to claims.
To divorce/parenthood claimants, all your assets are defenceless. So in addition to what you currently own as assets, what you may potentially own in the future is defenceless too. One of the best examples of this would be an expected inheritance. You can know about various asset protection strategies for individuals and families that help you in your asset protection.
3. You should also need to know the government-protected assets against creditor claims for your state. There are some categories of the government-protected assets. These are as follows:
- Insurance products
- Retirement savings plan accounts
The Central law helps you to protect your retirement plan accounts against creditors. The other government protected assets is insurance products protection and it is a state dependent and state regulated. You homestead usually carries some dollar limit protection. Many states have much higher homestead values protected than another state.
4. You should also need to know a court's capability to claim assets from you for a claimant.
The basic criteria to have a property you own claimed under a court order are that those assets are known to exist and controlled by you.