Creating an asset protection plan is a vital part of financial success. It would be foolish to put effort into making intelligent investments to grow your wealth without having a plan for when that wealth could be at risk to creditors. A thorough wealth management plan will consider all kinds of risks. This includes a lawsuit that could lead to a significant financial setback. To prevent this, an asset protection plan is set in place to keep wealth out of reach. Some of our clients have an asset protection plan but would like to re-examine their plan or create an entirely new one. This article will look at asset protection basics, standard asset protection, and how Alpen Partners can create or revise your plan today.
An asset protection plan keeps an investor’s investments safe in the event that someone tries to win parts or all of their wealth in a lawsuit. While a creditor is concerned with strategies for collecting, debtors are working diligently to just the opposite and protect valuable assets. Investors can legally and safely hold their assets out of reach. When creating this plan, investors strategize with their advisors to take assets and shift nonexempt assets into exempt assets. Skilled professionals, like Alpen Partners, guide investors of all kinds in creating their asset protection plan so that it is completed within the legal bounds of all jurisdictions. To create an asset protection plan, you will have to have in-depth knowledge of debtor and creditor law, fraudulent transfers, tax planning, civil litigation, property laws, bankruptcy, and other related areas of law. Therefore, this is not typically a task to be done alone by the average investor. Although asset protection sometimes has a bad reputation, asset protection is not about avoiding taxes, keeping secrets, or defrauding creditors. Instead, it is a tool to provide an incentive for settling a claim, improve a debtor’s bargaining position, offer options when a claim is asserted, and deter litigation.
We will now look at some techniques and tips for a successful asset protection plan.
An asset protection plan must be created before a lawsuit arises. The worst thing you can do is start your asset protection plan when a claim or liability arises. You will not have everything in order in time. Further, if an individual gets caught trying to move assets after a lawsuit has begun, severe legal actions can occur.
Many of our clients go offshore with their asset protection plans, especially for the level of privacy and security offshore banking can offer. Potential creditors would inevitably run into numerous roadblocks. Offshore asset protection allows investors to use the foreign jurisdiction statutes that get them strong protection. These strategies often include stock portfolios, precious metals, retirement accounts, and self-directed IRAs.
One option for secure protection is an international trust, often known as an offshore asset protection trust. If created correctly, international trusts can be one of the most robust forms of asset protection. With an international trust, investors legally transfer out of reach of future creditors and put them in an impenetrable place by taking the assets out of their name and putting them in the international trust. As the owner of the assets, they choose the trustee, settlers, and beneficiaries and still have control of the assets while in the offshore asset protection trust.
Another option for investors looking to protect their wealth is an offshore LLC. With this technique, investors form an LLC company and place the ownerships of assets under the company. The LLC can be owned by one person or a group of people. These people are known as members. This company protects members against lawsuits, requires less paperwork than other business types, offers tax benefits, and more. An LLC can be formed domestically or offshore. Suppose the investors choose to keep their wealth offshore in an LLC. In that case, they will also have closer connections to favorable banking and investment opportunities, diversify their investments, or even save money while living abroad.
An insurance plan pairs well with your asset protection planning. An insurance plan will help soften the blow of a loss by shifting it to an insurance company. While an asset protection plan can fend off potential lawsuits, it won’t pay for your legal fees in the event a lawsuit does happen. Life insurance policies ensure that any dependents are financially taken care of if the policyholder dies sooner than he or she expected. These plans can be either a term-life or whole life insurance plan. Many plans are exempt, at least partially, from a creditor’s claims. You can place your policy in an irrevocable life insurance trust for added protection.
Another option is an annuity, which provides retirement income to the plan owner. The savings are tax-deferred for the policyholder. The annuity does have death benefits for beneficiaries, but it’s not tax-free. Annuity plans are also out of reach of creditors.
Unfortunately, there isn’t a perfect, universal asset protection plan. It is essential to use common sense and think about the goals and needs. Each asset protection plan will be determined on an individual’s assets and their plans for the future. By looking at your short-term and long-term goals, you can construct important figures such as your current and future income, how much you will need to retire, and how much you want to pass down to beneficiaries. Connect with an expert to create or revise your asset protection plan. Alpen Partners offers high-earning clients a comprehensive range of services, including asset protection, financial planning, estate planning, and more. Alpen Partners is a credible alternative to existing or projected in-house organizations thanks to its efficient and cost-effective solutions.
No matter the problem, Alpen Partners will handcraft a solution for you. We know that there is no one-size-fits-all when it comes to financial success. Our approach involves working with our clients to make a unique plan to meet their needs. Rest assured that we will work hard to guide you through the process of meeting your financial and personal goals.
Contact us to enhance your financial plan today.