Asset protection planning is a legal process through which you recognize the possibility of your assets being at risk due to creditors or potential lawsuits and taking proactive steps to shield these assets.
By planning in advance, you set yourself up to protect some assets if and when someone comes after you. Unfortunately, people perceived as holding wealth or in high-earning professions can be targets for lawsuits for this very reason.
Working with an experienced Pasadena asset protection planning lawyer is strongly recommended to cover all of your bases and verify that you’ve considered all of the options. There are four primary options to consider as part of your asset protection plan. These include:
• Contributing to retirement plans, such as IRAs that have limited protection.
• Retitling property, such as renaming it as tenants by the entirety for protection against either spouse’s individual creditors.
• Giving away your assets although you need to be careful to make sure that these assets are not exposed to the new owner’s creditor claims.
• By insurance, such as umbrella policies, errors and omissions, homeowners’ liability and malpractice insurance that provide a means of covering losses in the event of a lawsuit.
One other option not available for California residents is creating a Domestic Asset Protection Trust. While you might have heard of this from people out of state, you’ll want to work with a Pasadena estate planning attorney to verify that your chosen asset protection strategies are legal and effective in California.
Make sure to communicate with an experienced and qualified estate planning lawyer to learn more about how asset protection planning can give you financial peace of mind.
