Updated: Sep 12
A Quick Guide To Asset Protection Strategy In California
What Is Asset Protection?
Asset protection is a strategy for dealing with a litigious society. It's founded on the idea that assets held in your name can be confiscated by a judgment creditor, whereas assets held in someone else's name are more protected.
In other words, assets owned by a limited liability firm or corporation do not belong to you personally. Therefore, they cannot be taken from you if you lose a case. However, in order to have those safeguards in place, you must follow all legal obligations, best practices, and filing requirements.
What Can You Protect Your Assets From?
Asset protection is a general term for safeguarding your assets before anything happens to them. In short, before a lawsuit, divorce, or other legal challenges arise, you'll want to make sure your assets stay with you or the people you intend to pass them on to.
Here are a few reasons why people find Lancaster Estate Attorneys to help them strategize:
1. Protect Assets From Spouses and Other Members Of The Family
You'll want to protect your assets from being stolen by or allocated to your present spouse in the event of a divorce. Asset protection must be completed before the start of divorce procedures in this case.
You can protect your assets by obtaining a prenuptial agreement with careful thought and consideration before marriage. If you're already married, a postnuptial deal can be used for the same goals.
Individuals can also use pre and post-marital agreements to protect assets on behalf of future beneficiaries, such as children from a previous marriage. Domestic asset protection trusts can also clearly demarcate each spouse's financial and asset interests, as well as their shared property.
2. Protect Yourself From Creditors
If you do not pay your debts, your creditor can obtain a court judgment against you. Liens might be put on your assets as a result of such a ruling. The formation of a limited liability corporation, a family limited partnership, or an asset protection trust are all legal strategies to shield your assets from creditors.
You can lawfully shield certain assets from creditors' claims without committing tax evasion if you have correctly created an asset protection strategy before being in default.
3. Protect Yourself From Losing Assets In Lawsuits
Asset protection can also help you secure your finances and property from legal action.
By structuring funds, real estate, and other assets in a way that decreases their vulnerability to litigation and court orders, some forms of property can be protected in the event of a lawsuit.
A Lancaster Estate Lawyer can assist you in retaining your financial well-being and prevent your assets from being depleted by persons or companies suing you.
How Can Your Assets Be Safeguarded?
Here are some pointers for putting together your own asset protection strategy. Here are a few tips to help you:
Before you are sued, make a plan to protect your assets.
Separate your personal and business assets.
It's important to remember that being a lone proprietor is dangerous.
For asset protection, use a registered corporation.
Maintain legal safeguards by meeting annual obligations.
Incorporate your company to protect your assets.
Make sure you have commercial insurance coverage that covers everything.
Scams involving asset protection and incorporation at a discount need to be avoided.
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