Money and how to protect it can be a challenging (but essential) topic to talk about. Cultivating financial knowledge at an early age can change the way you earn, use, save, and protect your hard-earned assets. In a lawsuit-driven society, asset protection can be the single biggest determination of future financial security for you and your family.
We asked four asset protection experts to share one piece of wisdom on how to protect one’s hard-earned assets, here’s what they said:
Be Proactive, Not Reactive.
“Own nothing, control everything. If you own it, you can lose it. People work their entire life to make money, but never even stop once to think about protecting it. One lawsuit can wipe you out. You don't want to have to start all over. Take your chips off the table. You don't buy the life insurance after you die. You don't buy the car insurance after an accident. You must be proactive.” – Hillel L. Presser, Esq., MBA
Simply put, asset protection adopts a range of strategies to shield money, properties, and other assets against lawsuits and creditors. The goal of asset protection is for one to own nothing that is eligible for creditor seizure by adapting legal strategies that transform unprotected assets into protective entities. However, procrastinating to start your asset protection planning until trouble strikes can only make it more difficult to climb out of a financial hole. Act now!
Protect Everything, No Matter Your Income
“Often people will say to me, “Well I don’t have much, I probably wouldn’t qualify for asset protection.” However, this couldn’t be farther from the truth. If a multimillionaire was faced with the threat of a million+ dollar lawsuit, they would have a real chance of financial recovery. Unfortunately, for someone with modest wealth, a threat of that size could wipe them out entirely. It’s imperative to protect your hard-earned assets, no matter your net worth.” – Cassidy T. Kapper, Esq.
Along with COVID-19 numbers, lawsuits in America are on the rise. Regardless of one’s income, lifestyle, or occupation, anyone can become a lawsuit target. A lawsuit, creditor, or an accident can put your car and collectibles to your home and life savings at risk. Don’t take your current financial stability for granted—think defensively and begin taking steps to protect vulnerable assets.
Work Smarter, Not Harder
“If a client has multiple vacation properties, restaurant chains, or a multitude of other entities, having them in multiple LLC’s gives a client extra firewalls and limits their likelihood of significant losses. Although entities such as LLC’s and Limited Partnerships are not lawsuit proof, piercing multiple entities is going to be more time consuming and expensive for a creditor. Additionally, spreading your assets across multiple entities inherently makes the piercing of one entity less lucrative because each holds less value” – Aaron R. Granoff, Esq., LL.M
This is probably one of the most common advice you’ll hear, but for good reason! Asset protection is the smartest and most effective way to discourage litigation given that it makes it difficult and expensive for a creditor to go after one’s protected wealth. Most asset protection plans combine a multitude of protective “firewalls” or tools and strategies to protect one’s wealth under the worst-case scenario—losing a lawsuit. Having “multiple baskets” or firewalls discourages litigation by convincing a potential plaintiff you have no exposed wealth they can seize or worth going after.
Pass on Your Wisdom with Your Wealth
“From an estate planning perspective, the biggest misconception is that a revocable trust provides asset protection. It does not. It can be designed to provide asset protection for the grantor’s beneficiaries after his or her death, but it will not provide asset protection to the grantor while alive. It needs to be combined with other asset protection tools.” – Elise Gross, Esq., LLM
A strong asset protection plan is often intertwined with estate planning. Assets titled under a revocable trust offer no asset protection because once amended or revoked, such assets become vulnerable to lawsuits and creditor claims. However, by combining your estate plan with asset protection tools, assets are titled and protected under corporations, LLCs, and other legal entities, not you or your family—providing control and lifetime protection.
And there you have it, four pieces of asset protection wisdom to live by! At the Presser Law Firm, experts are constantly inventing and personalizing new legal strategies and tactics to make sure you control and protect your hard-earned assets. Call us today to learn more about how to begin your asset protection and estate planning!