General Information on Asset Protection
Due to changes in our legal system, Asset Protection is becoming more and more important. Asset Protection applies particularly to people with higher incomes and higher net worth because they become a better target for people to go after.
Creditors and Predators
If one gets into a financially difficult position, one’s assets are subject to being taken by the court system and given to others. There are two major classifications of people (or institutions) that may be in a position to take your assets: Creditors and Predators. Creditors can be anyone to whom you owe money, whether it is by a normal debt or as the result of a lawsuit or from bankruptcy. Predators, on the other hand, is just my way of talking about a divorcing spouse. As you probably know, with some exceptions, if a couple divorce in South Carolina their assets are commonly divided equally among the husband and wife.
Protecting your assets from Creditors and Predators
Asset Protection planning is a process of organizing the things one owns in advance to safeguard your assets from Creditors and Predators.
In advance means the Asset Protection must be done before there is a threat or hint of action by the Creditors or Predators. If action is not taken until after the Creditor or Predator get involved, the court system may “undo” the action on the basis that it was a fraudulent transfer. At Cutchin Law Firm, we will question you very closely concerning the possibility of a fraudulent transfer as we refuse to be involved in any such transaction.
Asset Protection can be applied to any assets, including a professional practice or an operating business.
Goals of Asset Protection
For the most part, Asset Protection is not a fool-proof method of keeping one’s assets safe from Creditors and Predators. Asset Protect is a method of deterring litigation. It may be used to avoid litigation altogether, or it may be used as a method of settling with the other side on a much less expensive basis.
Regardless of the end result, Asset Protection must be “user friendly” for the person using it, or that person will not adequately protect his/her assets in the first place.
An Asset Protection plan must be a high quality plan for it to have any hope of working. It must be an all-encompassing plan to protect your assets from Creditors and Predators inside and outside your business. Many people create an LLC or a corporation to protect themselves from liability if the business is sued, but they never stop to realize their business could be taken away if they are sued personally for something which does not even involve the business.
Please click here to contact us for an initial consultation at no cost to you so we may assist you.