Many people are skeptical about asset protection and in a lot of cases, their fear is a result of comments credited to their attorneys about its supposed illegality and inefficacy. There is a need to correct this wrong impression as it is indeed erroneous. Asset protection as a means of shielding your assets from tough attacks by creditors is not illegal if done within the bounds of the law and not a hasty and fraudulent attempt to thwart the ruling of the court. By protecting your assets, your net-worth as an individual does not decrease and you do not lose your assets, they are just no longer in your name. This also means susceptibility to attack reduces.
If you have creditor who obtains a judgment in court against you, your properties in various counties where you live or may live automatically have lien obtained against them as soon as the creditor files the judgment in those counties. The lien is on assets in the name of the judgment debtor as stated in the judgment but when the assets are not in the same name as the one in the judgment, the lien cannot automatically attach them. This is where assets named in various entities such as Family Limited Partnerships and Asset Protection Trusts are important as they cannot be automatically attached. Less than 20% of judgments not collected in the first year end up not being collected so if your assets are protected by a robust and expertly designed asset protection plan, it will withstand the first two years and frustrate the creditor who will then move on to an easier target.
At Moss, we advise against weak asset protection plans such as giving your assets to your friends and relatives. We help you safeguard your assets with a vibrant, tax neutral asset protection plan with appropriate corporation agreements that will hold off creditors and convince them not to bother going after your assets.