Do I Need an Asset Protection Plan?

If you are like most people you automatically assume that an asset protection plan is just a fancy way to describe hiding or fraudulently transferring assets. In reality, nothing could be farther from the truth. Moreover, chances are that you could benefit from an asset protection plan at some point in your life.
As is the case with other situations in life, if you suddenly find yourself in a situations where you need to protect your assets it is probably going to be too late to do so unless you already have an asset protection plan in place. Protecting you assets could become necessary if you are personally sued for liability or for any of a myriad of other reasons. Asset protection also works in your favor if you need to qualify for a state or federal assistance program that takes resources into consideration when determining eligibility.
Protecting future assets can be done relatively easier through the creation of a spendthrift trust. In order for a trust to qualify as a spendthrift trust, however, you cannot be the trustee of the trust as is allowed in other types of trusts. Furthermore, the trust must be completely discretionary and there must be the possibility of distribution of assets to other beneficiaries besides you at some point in the future.
Protecting current assets can be a bit more complicated. Ensuring your assets is one method of protecting them. Transferring assets into another entity or into another category of assets that is protected are other ways in which you may be able to protect current assets. Be sure to talk to your estate planning attorney about your options.

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