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Asset Protection: What You Didn’t Think Could Be an Asset

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.

Asset Protection: What You Didn't Think Could Be an AssetIntellectual 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.

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.

1. 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% 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.

2. 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).

3. 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.

4. 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.

5. 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.

Please visit my website or contact me directly if you would like any more information regarding Asset Protection or Estate Planning, or would like a copy of my best-selling books on Asset Protection (complimentary if you mention this Blog).

- See more at: http://blog.vistage.com/finance/asset-protection-what-you-didnt-think-could-be-an-asset/#sthash.NZGUO8co.dpuf

YES, YOU CAN LOSE EVERYTHING!

You may think that your wealth is safe and that you don't need protection. But don't delude yourself and accept reality — for every 60 minutes you spend making money, spend 60 seconds thinking about how to protect it!
The Presser Law Firm, P.A. - Asset Protection Attorney
Located at 6199 N. Federal Highway Boca Raton, FL 33487. View Map
Phone: (561) 953-1050
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