The protection of assets usually takes two approaches, working together. First, investment assets should be held in such a way that one investment asset is not automatically available to satisfy a court judgment resulting from the liability produced by another asset. As an example of this, if an individual directly owns several pieces of rental property, all or any of these properties would be available to satisfy liability arising from a slip and fall by someone on any of these properties.
Conversely, if these properties were each held in a limited liability company, with the individual owning each of the limited liability companies, the only assets that would potentially be available to satisfy the same slip and fall claim would be the property in which the slip and fall happened.
A second often-used form of asset protection is the use of asset protection trusts. Such trust, formed either domestically or internationally, provide shelter for your assets from claims of unanticipated future creditors.
An individual considering asset protection planning needs to consult counsel experienced in this area as attempted asset protection is usually ineffective against current creditors and potential (future) creditors.
These options vary widely in their utility for specific purposes under different factual situations. Therefore, it is crucial to receive counsel from an skilled planner with experience in each of these areas
