THE COURT IS TAKING MY DOG? WHAT?!

Well, in most circumstances your common house pet would be safe from collections, but did you know that anything that's convertible into money is an asset, available to satisfy a creditor judgment? Thus, if your dog (or any other pet/farm animal) was worth enough money on the resale market and you didn't have any other assets to cover a judgment – they could be declared as an asset, repossessed and sold in satisfaction of your judgment.  That sounds crazy but animals aren't the only type of property that most people don't consider as assets. For example, Intellectual Property is one VERY important group of assets that should never be overlooked when lawsuit-proofing your finances.

Intellectual property is considered intangible assets and generally includes copyrights, trademarks, patents, industrial design rights and trade secrets. Intellectual property may also extend to webinars, websites, e-books, business plans, software licenses, and any other type of document or business structure created with a resale value.  Just like your other assets such as cash, bonds, real estate, equities and commodities – intellectual property too must be protected in the event of a creditor threat.

If you are still wondering why you need Asset Protection– the answer is simple.  You need Asset Protection to ensure that your assets are safe from creditors (especially those creditors who are not yet a threat), lawyers, foreclosure deficiencies, former or current spouses, children, relatives, and greedy lawsuit-obsessed citizens.  Lawsuits happen every single day, with many of them litigated over a frivolous issue where the Plaintiff is just out to get money.  If you protect your assets than you are no longer a target.  Put yourself in the best bargaining position by practicing Financial Self Defense!

Now that you understand why you need Asset Protection, the next question becomes when do you need it? In implementing an Asset Protection plan, procrastination could be your most fatal mistake.  The courts explicitly state that Asset Protection must be in place before a major judgment arises – otherwise the courts may deem the protection in place as a fraudulent transfer.  Simply put, courts use this rule to safeguard against people who "hide their assets" with ill intent.  If you're one of the many people in this country currently being attacked by lawsuits or creditors, don't worry; there may still be a few options available to you.  With that being said, I want to emphasize that the best protection, with the most options, isProactive Protection – acting before a threat occurs!

Here are some great tips on how to protect all of your assets; even those assets you didn't think were considered assets.

• Educate yourself. Learn about Asset Protection as much as you can – the more you know the better you will understand the process.
• Inventory your wealth. Most people have a lot more than they think.  Take stock of valuable domain names, telephone numbers, intellectual property, potential inheritances, and other non-liquid assets.
• Convert non-exempt assets into exempt assets. State laws protect some personal assets from lawsuits and creditors.  Those assets typically include your primary residence; personal items such as furniture and clothing; pensions and retirement funds; and life insurance. Find out the exemptions for your state and convert non-exempt assets (i.e. cash) into exempt assets (i.e.  life insurance).
• Take advantage of Homestead protection for your home, if your state law allows. Homestead protection protects your home from any threat of forced sale by your creditors.
• Protect every asset from every creditor. There's no point in protecting your money if your business is exposed. There's no point in protecting your business if your house is exposed. There's no point in protecting your house if your boat is exposed. Protect everything! Your Asset Protection plan should hold up whether your neighbor is suing you or the most powerful attorney downtown.
• Don't rely solely on liability insurance. Buy as much insurance as you can; it's cheap and it helps you sleep at night.  But realize that 70 percent of claims are not covered.  Your coverage may be inadequate for a particular suit; your insurance company may go bankrupt.  Having insurance and an Asset Protection plan is the belt and suspenders approach to hanging onto your pants.
• Avoid fraudulent transfers. A fraudulent transfer occurs if your creditor doesn't get paid because you sold an asset to a person or entity for less than its fair market value when faced with a lawsuit.  Such a transfer, done with the intent to hinder, delay, or defraud a creditor, can invalidate your entire Asset Protection plan.
• Don't title your assets solely to your spouse or to "straw men." They may have more financial problems than you.
• Protect your assets with liens. What is a $100,000 car worth if you owe $95,000? What is a $1 million house worth if you owe $950,000? Take out lines of credit.  Record mortgages against your property.  Make all of your assets valueless.  Become an unattractive candidate for a lawsuit.
• Transfer your assets to a protective entity. The key to Asset Protection is to own nothing while controlling everything. Transfer any non-exempt assets out of your name to protective entities such as trusts, LLC's (limited liability companies), limited partnerships, etc.

For more educational and exciting information regarding Asset Protection add yourself onto our complimentary monthly newsletter by sending an email to info@AssetProtectionAttorneys.com and mentioning "Gitomer."

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