What Is Asset Protection Law?

Have you ever worked with an attorney to set up an estate plan? While estate planning is
relatively common, have you also considered asset protection planning? Asset protection is
an essential area of law for those who want to protect their individual or business assets.

Asset protection is a term you may have heard before, but what does it actually mean?
Simply put, asset protection is the area of law concerned with keeping your assets from being
collected by creditors. There are experienced attorneys who practice in this field of law, and
while it’s complex, you can learn the basics of asset protection in this article.

How Does Asset Protection Work?

While asset protection is usually accomplished through the help of an attorney, it’s technically
part of financial planning. Also, contrary to popular opinion, you don’t need to be super rich to
benefit from asset protection. Small
business owners also may have
reason to protect valuable assets from
creditors, and this is often a good idea
for people who want to separate their
personal and business assets.

While asset protection is a group of
strategies that can protect various
assets from seizure and even taxes, it
all must be done in a legal way. Asset
protection is an above-board method
for safeguarding assets without going
to illegal measures, such as tax
evasion or fraud.

The Importance Of Being Proactive

According to experts, establishing asset protection early on is best. After a claim or liability
happens, it can be challenging to protect the assets from seizure, although this doesn’t mean
nothing can be done.

While proactive asset planning can save a lot of headaches, it’s never the wrong time to start
working with an asset protection attorney.

As attorney Gideon Alper at Alper Law points out, "It is never too late to engage in asset
protection planning—people can often improve their situation even after finding out about a
legal claim against them."

Asset Protection Or Bankruptcy?

While financial planning is worthwhile for most individuals and all businesses, asset
protection planning isn’t necessary for everyone.

If someone has minimal assets, they would likely benefit more by going through the
bankruptcy process when in major debt. However, if an individual or company has many
assets, it’s best to have an asset protection plan in place.

How Do You Find An Asset Protection Professional?

Asset protection trusts are an excellent idea for people in high-risk careers, such as wealthy
business owners, doctors, and even lawyers. When you need an asset protection
professional, it's vital to find an experienced attorney in this field and work with a firm that
specializes in this area.

According to the American Bar Association, it’s important to look for an estate planning
lawyer with expertise in asset protection planning. These individuals should have in-depth
information about many areas of law, such as bankruptcy, taxation, and business law.

Do All States Allow for Asset Protection Trusts?

While there are various strategies for asset protection, a trust is one of the most common
ways to protect assets from creditors. However, not all states allow for these trusts. The
states where you can establish an asset protection trust are:

● Alaska
● Delaware
● Hawaii
● Missouri
● Nevada
● New Hampshire
● Ohio
● Oklahoma
● Rhode Island
● South Dakota
● Tennessee
● Utah
● Virginia
● Wyoming

While a trust may not be an option in your state, you still have ways you can protect your
assets. The best way to get started is by finding an estate planning lawyer near you who can
answer questions about your financial situation.