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Practical Asset Protection – Part 1

This post is the first in a series on Practical Asset Protection.

First, the two basic rules of asset protection.

Rule #1 of Asset Protection – Don’t Do Asset Protection if you are in a lawsuit or if you think a lawsuit is coming.

Asset protection only works, if it works, if you plan way way before you even have a clue a claim may be filed against you. Otherwise, its a fraudulent transfer, and you and your attorney could be subject to felony charges.

Rule #2 of Asset Protection – Don’t be a sheep and follow the latest fad.

There are many attorneys and investment advisors promoting the latest scheme to protect your assets. In most cases it is just that, a scheme. And it probably won’t work. Jay Adkisson, one of the top asset protection litigators in the country, said at the Southern California Tax and Estate Planning Forum last month to never follow the advice of the marketers and the herds. If everyone is doing it, then assume it won’t work. Use common sense.

With that said, there are some practical ways you can protect you assets, including:

Homestead Exemption

Retirement Plans

Charging Order Entities (LLCs and LPs)

Qualified Personal Residence Trust (QPRT)

Spousal Limited Access Trust (SLAT)

We will explain each of these in this series.

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