What Is Asset Protection Planning In Georgia?

Asset protection planning covers various ways that someone can protect themselves from the effects of taxation, divorce, bankruptcy, court judgments, or any other claims that people or companies may make against their properties.

Why Is It Important To Protect Your Assets?

It is important for people to protect their equity in critical assets like their business, especially if they are in an industry that exposes them to liability claims. We see this in medicine, law, and other professional fields where there is a potential – even a small potential – for a lawsuit or some other major event to occur that puts the security of personal or business assets at stake. Not everyone needs to seriously consider asset protection as an attorney, but for those who have substantial assets and higher risks, there is definitely a need to discuss this sort of protection.

Are Certain Assets Automatically Protected?

Yes, certain assets are almost or automatically protected against judgments in bankruptcy. The most common ones that people encounter are retirement plans. For example, 401(k)s and IRAs are shielded from bankruptcy. That is a government policy to help ensure that people who go through bankruptcy do not get so completely wiped out that they will be forced to live out their remaining years in abject poverty. The government has essentially decided, “These assets can be put aside.” Additionally, some assets are naturally held aside or protected due to the fact that they are left to the benefit of someone else. Assets left in trust to a child or to someone else are, in all likelihood, protected. For the most part, assets in your name and assets that are owned by the business are potentially subject to claims by creditors in bankruptcy. So it is important to look at asset protection for these issues.

Is There A Legal Process To Protect The Unprotected Assets?

The specific legal process depends on what type of asset it is. If there are funds available, we can easily move them into a type of structure that is asset protected and you probably will not need to have a lawyer do a lot of work on this. But for other types of assets – those that we cannot easily get out without setting up some sort of trust or other financial arrangement – it is more important to sit down with your attorney or financial advisor to devise a strategy to shield it from creditors and other entities.

Is It Illegal To Arrange For Asset Protection From Lawsuits And Creditors?

No, under the right circumstances, asset protection is legal and advisable. A reputable asset protection attorney will put together a strategy that is legal and sound.

Asset protection has a bad reputation due to high-profile cases of the wealthy shifting assets overseas to avoid judgments, court orders, and the legitimate claims of spouses for alimony or child support. The illegal type of asset planning often occurs when they did not put a strategy in place before these claims and judgments come into place.

Talking with your asset protection lawyer and financial advising team to design an asset protection strategy is neither morally wrong nor illegal. It is good planning and if done right, will fit within a long-term strategy of estate planning, tax planning, long-term gift planning, and the overall structuring of a strategy that reflect your desires and values.

Does Someone Need Asset Protection If They Are Not A Wealthy Person?

It is important to discuss asset protection regardless of your level of wealth. I think it is always important to know what would happen in a scenario where there was a judgment, a divorce, or where bankruptcy is a potential issue just to know how things may play out. Ultimately, if someone has low assets and does not need that kind of protection, it is probably still worth their time and energy, as you grow and develop and your family changes, to know what that game plan should be.

Does A Revocable Living Trust Provide Sufficient Asset Protection?

In this case, no. The part of the revocable living trust that makes it not great for asset protection is that first word, revocable. If someone were to obtain a judgment against you, the first thing that they would do would be to try to grab any assets that are in your name or that could easily be in your name. What happens with a revocable trust is that the person adding assets in the trust is often the trustee of that trust as well. When a judge sees that you have assets in the trust, and you have the full power to pull those assets out of that trust and put them in your name and pay off the judgment, the judge is likely to order you to do so. Having a revocable trust is better than nothing, but not that much better than nothing. For asset protection, it is important to discuss a more aggressive trust strategy.

For more information on Asset Protection Planning In Georgia, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (404) 939-7562 today.

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