Asset Protection is pre-claim planning for those who are concerned that someday they might become liable to creditors unknown for claims unknown — what are known as “future unknown creditors”. Asset Protection is not about protecting the assets of somebody who already has a claim pending; that is known as “defrauding creditors” unless a reserve is set aside to pay existing creditors.
There’s a time to be planning, and there’s a time to be putting that plan into action. However, whether it’s the battlefield, the sports field, or the legal field, you ought not to be planning when the fur begins to fly! It’s just too late.
A recent Forbes article is a good reminder that asset protection is like fire insurance – the best time to take out a policy (i.e., make proper asset protection plans) is before the fire department arrives. The article is appropriately titled “Existence Of Claim Renders Some Clients Seeking Asset Protection Effectively Dead On Arrival.”
Asset protection is about making sure matters are structured now to protect them if a legal claim may threaten them later. If there already is a claim, then any act to protect assets becomes suspect and reversible (or punishable).
If you have reason to protect your assets due to some future risk you can envision, then now is the time to plan. Courts do not look favorably on last minute plays to protect assets.
For more information please visit my website: www.millsestateplanning.com.
Reference: Forbes (January 31, 2013) “Existence Of Claim Renders Some Clients Seeking Asset Protection Effectively Dead On Arrival”