There are numerous techniques that can be utilized to protect your assets. The laws differ from state to state and country to country, so it is advisable to find out whether your properties can be taken from you under your state’s laws. Some states have homestead laws that protect your home from creditors. Property title can be transferred to friends or family members for protection, although this has some obvious risks.
Pension plans, insurance policies, and trusts can help protect your assets. Retirement plans are one of the best protections. For example, the U.S. Supreme Court Justices have ERISA plans that give protection against creditors. Though regular individual retirement accounts (IRAs) do not have any federal protection, they are protected by statute in some states.
Limited partnership can also offer protection for assets. Setting up a business as a family limited partnership firm or limited liability company can help protect personal assets from business-related lawsuits. Sole proprietors and basic partnership firm owners do not qualify for this type of asset protection.
Assets can be converted into homestead property or annuities that are creditor exempt. Assets can also utilize equity stripping, which allows you to place liens on assets so that when a creditor looks at your asset they will see it as property encumbered by a loan worth more than the asset itself. This makes it not desirable for the creditor to pursue that asset.