ASSET PROTECTION

It is the strategies for and concept of guarding the wealth of someone. it is a type of planning with the purpose of protecting the asset of someone from the claims of creditors. Business entities and some individuals use techniques of asset protections to create a limit to the access of the creditors to their valuable assets, while still operating under the terms of the debtor-creditor law.

Asset protection helps in insulating assets legally without engaging to unlawful practices like bankruptcy fraud, tax evasion, fraudulent transfer (under the 1984 Uniform Fraudulent Transfer Act), contempt, and hiding of assets (concealment). Financial experts say that the effective asset protection should be done even before the liability or claim occurs because it is too late to have any kind of asset protection afterwards. Asset protection methods are family limited partnerships, accounts-receivable financing, and asset protection trusts.

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