Protecting Your Assets From Creditors

The last thing anyone wants is to carefully save and wisely invest their assets only to have them eroded by creditors or a personal liability lawsuit. When a proper asset protection plan is created, you and your family are better protected from fraud, forced asset liquidation and liens against those protected assets.

What Are Assets?

Many people believe they do not have assets because they do not own a business, or have excessive amount of accumulated wealth. This is not true. Assets include:

  • Your home
  • Land
  • Retirement funds
  • Education funds and savings

An asset protection trust is one way to protect your assets and ensure the later viability of these assets. These types of trusts work to also protect assets from federal estate taxes.

Who Benefits From An Asset Protection Plan?

In short, anyone with assets. Because everyone is in some degree vulnerable to a lawsuit, fraud, predators and creditors. Even something as everyday as a motor vehicle accident can put your assets at risk. Credit card debt, lawsuits, divorce, bankruptcy and mortgage loans are all potential threats to your assets. Business owners and product producers especially need to guard their assets.

Why Create An Asset Protection Trust?

Asset protection trusts are designed to insulate trusts against attacks from predators, creditors, lawsuits and frauds. What's unique about asset protection trusts is that they are irrevocable for a set term of years. The maker of the trust is also not named as a beneficiary. After those specified set years, the undistributed assets of the trust return to the maker of the trust. Working with a qualified lawyer can ensure that your assets have the appropriate terms and are effectively shielded.

These trusts are generally created outside of the United States but not always. Both offshore and domestic asset protection trusts can be created depending on the goals of the maker of the trust. With domestic asset protection, the trust is bound by the laws of the state.

Different states have different laws regarding these types of trusts, which is why it is important to work with an attorney who is seasoned in Texas state law trusts and wills. Certain articles in the Texas constitution in particular make Texas a state where the law protects you and your homestead from creditors. Timely review of your assets and trust preparation can maximize your protection.

At Kiefaber & Oliva LLP, we will design a trust or plan that affirms your insurance and lifestyle needs, and allows your financial advisor to continue investing.

An asset protection plan and trust may be the answer to preserving your assets now so that they can be distributed at a later time. If you are considering creating an asset protection trust or want to know more about creating an asset protection plan, speak with a qualified Kiefaber & Oliva LLP, trust and wills attorney. Call our Houston office at 713-391-8704 to set up an appointment before your assets are at risk. Or contact us online.