“What Is Asset Protection”
James Nsien2
http://james-nsien2.com
Asset protection (sometimes also referred to as debtor-creditor law) refers to a set of legal techniques and a body of statutory and common law dealing with protecting assets of individuals and business entities from civil money judgments.
Origins of asset protection
Asset protection began to develop as a stand-alone area of the law in the best price cialis late 1970s. It began coming into prominence in the late 1980s, with the advent and the marketing of offshore asset protection trusts. Colorado attorney Barry Engel is credited with the introduction of that concept and the development of asset protection trust law statutes in the Cook Islands.
Over the years, this new field of law enjoyed a marginal reputation, but started going mainstream in the mid-1990s. A 2003 article in the Wall Street Journal claimed that 60% of America’s millionaires have considered engaging in asset protection planning.
Legal substance behind asset protection
There are literally dozens of various asset protection structures in use today. The specific structure best suited for each person will depend on:
(1) The nature of the asset being protected (i.e., different
structures are used to protection rental real estate, a
personal residence, a bank account, a retirement plan,
etc.);
(2) The timing of the claim or lawsuit;
(3) The debtor’s risk adversity and
(4) The aggressiveness and the intelligence of the creditor.
Asset protection planning:
Asset protection planning involves figuring out and applying a lawful series of techniques that protect your assets from claims of future creditors. The techniques are designed to deter potential creditors from going after you, and frustrate them if they do, generally by making it difficult or impossible for future creditors to grab hold of your assets or collect judgments against you.
In cases where significant sums are involved, asset protection planning often includes setting up a series of trusts, partnerships and/or off-shore entities to hold legal title to your assets. There is a very sharp dividing line between “legal” asset protection planning on the one hand, and actions to defraud creditors, which are criminal, on the other. A future creditor who recognizes how difficult it would be to collect on any judgment it may win, might decide it makes little sense to pursue a claim, or be willing to settle for pennies on the dollar.
For that reason it is essential to have an attorney guide you through the process.
Several different factors determine the nature and the type of planning that should be used for a given client.
The three most important factors are:
(i) The identity of the creditor pursuing the client,
(ii) The nature of the assets that will be pursued by the creditor, and
(iii) The extent to which the debtor is willing to go to protect his assets.
The identity of the creditor refers to how aggressively the creditor will pursue the debtor’s assets, and how knowledgeable the creditor is about debt collection laws. The more aggressive and knowledgeable the creditor, the more obstacles we need to erect in his path. The nature of the assets refers to the buy cialis no prescription specific assets owned by the debtor. There is no “magic bullet” asset protection strategy; different structures are used to protect different types of assets.
It should be noted that many debtors approach the fraudulent transfer analysis from a very practical perspective, as follows.
Assume the debtor is facing a significant lawsuit risk with a large anticipated judgment.
The debtor has two asset protection choices:
(i) Do nothing and stand to lose all assets when the plaintiff becomes a creditor, or
(ii) Engage in some asset protection planning. Because the common downside of a fraudulent transfer is the creditor’s ability to set aside the transfer.
A debtor may have nothing to lose (other than the transaction costs) by engaging in planning that may (or may not) be deemed a fraudulent transfer. From a creditor’s perspective, a successful fraudulent transfer challenge gives the creditor the legal right to pursue the transferred assets. Having a legal right to do something does not mean having the actual ability to do so, and does not mean that the pursuit of the transferred assets would be cost effective.
People who need asset protection:
Below is a list of the most common people who need asset protection:
• The very wealthy – People who are financially well off, and especially those who fall into the rich category, are more at-risk for lawsuits and other methods of trying to get your assets. The very wealthy are the most common group of people who need asset protection.
• People with imminent problems – If you know that you will face some legal, financial, or even medical difficulty in the near future, you may need to protect your assets. Examples of this include divorce, bankruptcy, serious illness, etc. Anytime you know that someone may try to take from you in the near future for any reason, you should begin a plan to protect your assets.
• People with high risk jobs (Jobs that attract lawsuits) – People who work in a profession that has a very high liability risk need asset protection. This may include many types of jobs in the medical and pharmaceutical industry, as well as construction, law and finance. Even though you may have insurance, your coverage may not cover you or may not be sufficient. You should take extra precaution and protect your assets.
Even buy Male Enhancement Oil online if you aren’t in any of the above groups, you should consider some degree of asset protection. If you own your own business, you probably need some sort of asset protection. Injuries on your property could lead to a lawsuit that could cause you to lose many of your assets, and insurance companies can often find loopholes to avoid paying all (or any) of the amount that is owed.
James Nsien2
NCN Internet Marketing Services
NCN Real Estate Investments, LLC
http://james-nsien2.com/ncn-real-estate-investments/
