As you age, it is important to begin thinking about how to protect your assets. Even younger individuals need to do this, particularly if they've inherited money or earn a lot each year.
Asset protection isn't just for those wanting to preserve their assets for their loved ones. It's also for those who want to protect their assets against claims from creditors. Here's a little more on asset protection and what might help you keep your assets safe.
Asset protection: Keeping what you earn safe
Asset protection trusts and technologies have one goal: to keep your assets safe. Asset protection isn't just one simple process. It's a term that includes many strategies for protecting your wealth. It's a kind of financial planning, which means that you will need to understand your financial situation and where your money comes from to use it successfully.
Protecting your assets from creditors comes down to taking them out of your name in many cases. For example, if you have an irrevocable trust, the creditors cannot take from your trust due to it being out of your control. Certain assets, like your retirement plan or other specific assets, are also exempt if you have to go into bankruptcy, preserving them no matter what's happening in your life.
Another thing that protects property from creditors is joint ownership. When the creditor comes after only one of the two owners, they generally cannot take the asset as it did not entirely belong to the individual they seek payment from.
Asset protection is a great concept to understand. It can better help you prepare your estate plan and be cautious with your assets in your everyday life.