"Show me the man you honor and I will know what kind of man you are." Thomas John Carlisle
What is Asset Protection The concept of and strategies for guarding one's wealth. Asset protection is a type of planning intended to protect one's assets from creditor claims. Individuals and business entities use asset protection techniques to limit creditors' access to certain valuable assets, while operating within the bounds of debtor-creditor law.
Asset protection helps insulate assets in a legal manner - without engaging in the illegal practices of concealment (hiding of the assets), contempt, fraudulent transfer (as defined in the 1984 Uniform Fraudulent Transfer Act), tax evasion or bankruptcy fraud. Experts advise that effective asset protection begins before a claim or liability occurs, since it is usually too late to initiate any worthwhile protection after the fact. Some common methods for asset protection include asset protection trusts, accounts-receivable financing and family limited partnerships.
In addition, many states allow exemptions for a specified amount a home equity in a primary residence (homestead) and other personal property (such as clothing). Each state in the United States has laws to protect owners of corporations, limited partnerships (LPs) and limited liability corporations (LLCs) from the entity's liabilities.