In recent years, there has been a huge rise in the cases of litigation in the United States. Thousands of suits are filed every year. Proper asset protection planning is required to safeguard your assets from the reach of potential creditors. With the right strategy, your property will be shielded from any lawsuits or court judgments. The asset which is then controlled by a trustee is passed on to your chosen beneficiary. Asset protection is an important component of your estate planning.
How does the process of asset protection work?
Asset protection is the ethical and legal process where financial holdings are reviewed and restructured to get the benefit of legal exemptions by which the assets may be placed out of the reach of creditors in the future. The procedure mainly has four components: the settler the trustee, the beneficiary and the asset. An asset protection trust is created by the settler or grantor, where he or she transfers assets to the trust. The trust assets are then managed and controlled by the trustee and the asset is passed on or distributed to the beneficiaries upon the death of the grantor.
Who requires asset protection?
Any individual who has accumulated significant property can be a target for litigation, and effective strategies of asset protection are highly essential for wealthy people.
What are the strategies that are available?
There are different techniques of asset protection, from the simple to the complex. No particular strategy is able to cover each and every option. Different asset protection techniques of are applicable in various situations. However, in general, a plan for asset protection involves certain legal exemptions and several entities for protection.
Why should I utilize an offshore trust?
An offshore trust is used for higher secrecy. In such a case, your asset(s) is/are transferred to a trust in a foreign country. Asset protection legislation has been enacted by many countries like the Bahamas, Cayman Islands, Mauritius, Cook Island, Belize and more. In an offshore trust, your assets are more secure since they cannot easily be reached by the courts in the United States. This makes it very difficult for the creditors to get in touch with your property.