People crafting an estate plan often include a variety of asset protection strategies. Unfortunately, most people don’t know very much about asset protection, and many have misperceptions about what it involves. For example, a lot of people believe that asset protection is only something very wealthy people need to do, even though this isn’t true. Asset protection can help many people by shielding as much of your assets as possible. By using asset protection strategies, you and your estate will be able to protect your possessions for as long as possible.
Let’s take a closer look at asset protection in Port Saint Lucie, FL and what it involves.
Protecting from what?
In Florida, asset protection mainly involves protecting your assets from potential liability. Liability is a legal term that means being held accountable for something you’ve done. Liability can arise out of any number of situations, but is often a concern to business owners, professionals, and others who work in liability-prone areas.
For example, people who own a small business have to be prepared for a number of liability issues. So-called “slip and fall” accidents that happen on your premises can lead to personal injury lawsuits. Breach of contract issues, malpractice, product liability, sexual harassment, and even intellectual-property lawsuits are also common sources of liability.
Yet beyond professional liability issues, there are also personal liability issues. Whether you go through a divorce, are involved in an automobile accident, or face personal debts, all of these can result in you losing significant assets.
Asset Protection Strategies
There are many ways to protect your assets, some of which you might be familiar with, while others might be more obscure. For example, a common way to protect your interests is to create and use business entities. If you are small business owner, for example, using a business entity that shields your personal assets from your business liabilities is a necessary step.
If you’re not a small business owner, you might still be able to use business entities, but you’ll probably rely on other tools more. For example, insurance is a commonly used form of asset protection that almost everyone employs. Whether it’s auto insurance, homeowner’s insurance, or long-term care insurance, having a good insurance plan can be a significant asset protection tool.
Other strategies involve more complicated steps. For example, if someone sues you and wins, that person has the right to collect your assets in order to satisfy the judgment. However, a judgment creditor cannot collect everything you own because all states exempt certain types of property from collections. One asset protection strategy takes some of your property that is currently not exempt and turns it into exempt property.
Of course, asset protection is a complicated and often time-consuming process. If you need advice about asset protection and your options, talk to your estate planning lawyer.