Wondering why asset protection matters? Because a lawsuit can either wipe you (and your family) out financially. Or it can make your life miserable for years while you litigate to defend yourself in the court system.
Do you want to have to tell your spouse that you need to sell your house to be able to pay off a court judgment? Or tell your kids that they need to change schools because you need to move? Or tell your family that you don’t have money because a creditor took all the money out of your bank account?
Protecting your personal assets is essential, as the number of civil lawsuits in the U.S. continues to rise. By understanding the pitfalls of keeping your net worth in your own name and instituting some basic asset protection strategies, you can ensure that you and your family won’t be wiped out in a single lawsuit.
You Have a Fundamental Right to Protect Your Property.
If you read the history of the U.S.’s Declaration of Independence, you’ll discover that the phrase “life, liberty and the pursuit of happiness” came only in later drafts. The original concept came from John Locke’s The Two Treatises of Civil Government. In that, Locke referred to life, liberty and “goods” (or property).
Earlier drafts of the Declaration of Independence referred to a right to “property.” However, northern colonies were concerned that the southern colonies would later use the reference to “property” to justify their practice of slavery. So Thomas Jefferson replaced “property” with “pursuit of happiness.”
Of course, the modern idea of “property” encompasses much more than merely physical objects. For example, it also refers to intellectual property, such as patents and trademarks. Consequently, your asset protection plan should also protect these assets.
Why Asset Protection Matters for Society.
There are two HUGE reasons that asset protection matters for society. First, without it, people won’t take care of their assets. Second, without it people won’t be motivated to create value.
First, without the right to property, people won’t take care of their property.
If you don’t have an expectation that you are going to your car or boat from creditors, con artists, and the government, you won’t take care of it. Society is better off when people take care of their assets.
Taking proactive steps to protect your assets and investments allow them to grow and prosper. This creates more economic opportunity for everyone, making it easier to invest in new innovative ideas and products.
Second, without the right to property, people won’t be motivated to create.
Asset protection also ensures that people have an incentive to create wealth. Without proper asset protection laws, people have no guarantee that the time, energy, and money they put into building their wealth won’t be erased in a single legal judgement.
When people feel secure in the title to their property, they will be motivated to work and create value. If there is the fear that someone might seize those assets, regardless of the amount of effort put into creating them, people will understandably become less productive and motivated. Thus, a secure right to their property is essential so that individuals can be free to create value for society without fearing unjust confiscation.
Think about it. Where are most of the new inventions created? Communist China and Russia where people have limited right to own property? Or the United States where the right to own property is fundamental to our social and legal systems? Obviously, in a more free society like the U.S., there are more talented people who create new solutions to make the world better.
Asset Protection doesn’t mean you get to go through life hurting people.
Asset Protection does not mean you can go through life hurting people, avoiding responsibility and committing fraud. The purpose of asset protection is to ensure you do not lose your assets in an unjust lawsuit. It helps you protect yourself from someone suing you who has a stronger legal team and attorneys. It’s important to note that certain types of asset protection are illegal. Examples include fraudulent transfers of assets or sham trusts. So take precautions from engaging in activities that could be deemed improper or unlawful.
3 Reasons Why Asset Protection Matters For You Personally
Asset protection is essential for anyone looking to maintain financial security and minimize taxes in the long run. Here are three reasons asset protection matters for you.
It Reduces Your Risk of Loss.
Asset protection is a proactive way to reduce your risk of loss by taking the necessary steps to prepare for potential difficulties or issues that may arise. By creating and implementing an asset protection plan that provides safeguards, you are better able to protect yourself and your property should someone file a lawsuit against you. In addition to reducing the risk of losing your assets, asset protection can also minimize taxes and help maintain financial stability.
It Protects Your Family and Personal Wealth.
Asset protection ensures that your family and personal wealth remain safe in the event of a sudden change in your financial or health situation. For example, if there’s a significant decline in your income or health, you can use asset protection to secure your assets from creditors or other unforeseen circumstances. By taking the necessary steps to protect your investments, you’ll be preventing possible future losses and preserving all your hard-earned wealth.
It Help You Receive the Max Benefits From Insurance Policies.
Asset protection can help you get the most out of your insurance policies. When an asset is properly protected, it allows the individual to maximize their insurance coverage and receive the maximum benefit from their policy. Otherwise, the policy coverage gets depleted by paying for your defense attorneys.
Additionally, having a properly outlined asset protection plan can help individuals in a lawsuit if they are sued. It allows your lawyer to tell the other side that they will have difficulty collecting even if they win their lawsuit.
Understand Your Risk Exposure.
When it comes to asset protection, the first step is understanding your risk exposure. What kind of assets do you have and where are they located? Different laws and regulations apply to different states and countries. Taking stock of all your investments and financial holdings will give you an idea of where you might be most vulnerable should a claim ever arise against you. Are there any activities that could increase your liability? Knowing this information can help determine which asset protection strategies best suit your needs.
Ready To Protect Your Net Worth?
Attorney Paul Deloughery has been focusing on asset protection since 2004. He has helped hundred of other clients just like you. He provides proven, effective strategies that work. Give us a call at 602-443-4888. We’re here to help.