The accumulation of assets can make you a target for a wide range of issues, including lawsuits, scams, taxes, and regulatory interference. One of the most important choices you'll make is how you decide to try to insulate your assets from these potential threats.
An asset protection lawyer will want you to consider these three tools for protecting your rights and interests.
Business Formation
Most folks who develop significant assets do so through some kind of business, such as a medical practice, car dealership, software development firm, or beauty salon. If you didn't work with a business formation lawyer to set up the enterprise, your personal assets may be at risk.
A business formation attorney can configure your company to serve as a firewall. There will still be a risk that something could happen to the business, such as bankruptcy, a slip-and-fall claim, or a professional liability lawsuit based on a contract. However, the liability will stop with the business if it operates as an LLC or similar entity. That means no one can go after your personal assets once they've effectively sued the business into oblivion. At the minimum, your personal earnings and assets will be safe while the business goes down.
Trusts
An asset protection attorney will often encourage a client to establish at least one trust. Trusts are legal instruments that assign assets to an entity separate from you. Properly configured, a trust will name you or someone you care about as the beneficiary. While there may be limitations regarding how you can access the trust, it will pay the benefit like clockwork while insulting the assets.
Unsurprisingly, people will sue trusts for many reasons so you should establish a relationship with a trust litigation lawyer. A trust will probably outlive you so that person should also be comfortable serving as a trust estate litigation lawyer, too. It is possible a beneficiary, such as your children, could even sue.
Marital Property
If you're planning to marry, you should also talk with an asset protection lawyer about how to protect personal assets from the possibility of divorce. You don't want to try to solve this problem after you marry because it becomes much more complex. Ideally, you'll track and segregate your assets in ways that limit claims to them as marital property. Should divorce come, you'll then be able to document that the assets were separate according to your state's laws. It won't protect you from things like alimony or child support, but it'll limit your exposure during the division of marital assets.
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