Asset Protection Planning And You

Asset protection law is a specialized area of law relating to exemptions of certain types of assets from judgments. Owning exempt property is the simplest way to protect your assets from the claims of creditors. Each state or country has its own laws to define exempt and non-exempt property. Some property may be fully exempt, while others may be exempted up to a certain amount, and others may not be exempt at all. Most of the states in the U.S. give exemption to homestead property, clothing, personal belongings, and tools of a trade. Retirement plans and annuities are also protected by law in many states. Life insurance benefits may also be exempted. Federal and state laws determine the protection available from creditors and judgments.

Only some types of assets are automatically protected by law, so other assets need protection. Asset protection planning should be done before a lawsuit is filed. Once a judgment has been rendered the creditor will attempt to enforce the judgment against your assets. The creditor may do research to find your assets and if the creditor finds undisclosed assets you have no recourse. Plan for asset protection and keep your assets out of the reach of creditors.