What does asset protection mean?
Historically, one common definition of asset protection contains having a strategy and secretive plan to hide or cloud the visibility of assets from others.
Typical purposes have been to avoid potential taxes due, limit creditor claims in the event of default, deny claims on assets from ex-spouses or relatives, or minimize frivolous lawsuits.
Click HERE for a useful article on the topic from Investopedia.
A few key benefits to this approach:
- Keeps intentions clear and demonstrable.
- Potential actions are clean and honorable.
- Uses available legal remedies, financial solutions, and tax codes to minimize potential financial, emotional, and or spiritual damage to the family.
American football anyone?
But instead of moving the football from one endzone to the other, items of financial, sentimental, and spiritual value are placed in one endzone and the opponent tries to come from the other endzone to take your items.
Further explained below...
- Using various coverings, containers, placements, and patterns to make it difficult to identify, value, or access the assets. Or whether key assets have an existing encumbrance or senior lien.
- Any party who wants to potentially access your assets will have to start one hundred yards away in the opposite endzone and drive towards the endzone where your assets are located.
- The party becomes aware or is counseled that they will need a team, money, and determination to get in the game at all, and then must also agree to play by established rules of the game or be penalized or disqualified from continuing to play.
- Embedded in the strategy selected by design can also be regular intervals of progression that require significant increases in expense, time, and professional experience to pursue and with no guarantee of scoring a touchdown.
#1 Minimizing...
personal, family, business, and asset profiles individually and collectively but not hiding them.
#2 Use Existing...
proven, and effective tax codes, legal mechanisms, and financial solutions that apply to your specific disposition to execute a robust protection strategy. A strategy that makes it expensive and difficult to be penetrated by bad actors, frivolous lawsuit initiators, or those without legitimate claims or significant resources of their own to support an intended legal action.
#3 Training...
beneficiaries, successors, trustees, and other applicable stewards on intentions, desired outcomes, operational mechanics of the selected strategy, and what professionals should be contacted and when.