Wealth and Asset Protection: The Basics

Wealth and Asset Protection: The Basics

     Wealth and asset protection is the process of protecting the wealth you have built. There are many ways to protect your assets, asset protection can range from protecting your personal wealth from business creditors to preserving generational wealth for your family. Wealth and asset protection begins with determining which of your assets are nonexempt assets and positioning them as protected assets, out of reach of creditors.

     Wealth and asset protection must begin before a judgment creditor is already identified. State and federal laws protect the rights of creditors against transfers of assets to delay or defraud a creditor. Planning for protecting your wealth must begin long before any signs of trouble. In creating your wealth protection plan, you must analyze your short term and long term financials, business, and personal goals. Any wealth protection plan must be comprehensive and detailed to provide for positioning current assets and all future assets to reach your goals.

     By merely having the wealth protection plan in place is a huge deterrent to frivolous legal suits against yourself or your business. When legal opponents recognize that the wealth they seek to take is insulated by your protection plan, there is no longer a clear path to seizure. Think of wealth protection as putting your assets into secured containers. These containers cannot easily opened by the government , a court, or creditors. There are many options for secured containers including: land trusts, a living trust, LLCs, limited partnerships with a corporation, offshore LLCs, and even offshore trusts.

Wealth Protection Diagram_Fotor

     Each container has its benefits and drawbacks, analyzing your long and short term goals will determine which container is the best for you, your business, or family. For example if you placed an investment property into a land trust as a secured container, the ownership will remain private since the trust is the owner of the property not the individual. The trustee will hold title to the property, while the beneficiary maintains the use and value of the property. The beneficiary is exposed to legal liability, often the beneficiary is a corporation or an LLC to enhance the security of the container for the beneficiary.

     For even greater protection you can place wealth assets in secured containers within other secured containers. An example of this would be to take your land trust from above, with an LLC as the beneficiary, and placing this within a living trust. The living trust is a wealth management method designed to allow for maximum transfer of wealth after death or to the next generation. Now your property is privately held by a trust, which the beneficiary is a legal entity that is held privately in a living trust. This helps combine privacy, internal asset protection, limiting legal liabilities, and generational wealth protection or transfer.

     Every individual, business, and family has different needs and goals for wealth and asset protection. At Reidel Law Firm we spend the time to create and execute a detailed, comprehensive wealth protection plan to place you above and beyond frivolous lawsuit, creditors, and overbearing taxation. Contact Reidel Law Firm today to position yourself for success and security, call us at 832-510-3292 or use the form below.