The phrase “asset protection” is pretty easy to understand. It means protecting your assets, right? However, there’s more than one way to protect your assets. Choosing the right option or options is the hard part. You may want to consider some of the following asset protection strategies to safeguard your hard-earned property.

Early Planning Is Key

Strong asset protection strategies can go a long way toward protecting your property. However, some methods can get you into trouble if you use them at the wrong time. For example, setting up asset protection trust after a claim has been made against you can be considered fraudulent.

You may be vulnerable to creditor claims, civil judgments, malpractice lawsuits, or vengeful ex-spouses. If so, talk to your estate planning attorney about asset protection strategies as soon as possible.

Irrevocable Trusts Are an Asset Protection Option

Not all trusts offer asset protection. However, those that do may be just the thing you need to protect yourself. For example, establishing a domestic asset protection trust may put your property out of the reach of most creditors.

There are downsides to using irrevocable trusts. Discuss your options with your estate planning attorney and do not attempt to set up the trust yourself.

Retitling Property May Take It Out of the Equation

If you currently are the sole owner of property, consider adding a joint owner. It’s also possible to transfer your property to your spouse if you feel it is vulnerable. That’s risky, though. Another option is to set up an irrevocable trust and transfer ownership to the trust. Again, these options all carry risk and should not be taken without consulting with an experienced Alabama lawyer.

Buy Business Insurance to Cover Potential Problems

Certain business structures provide limited liability to the owners’ personal property. However, the business itself may need protection. Business insurance can help shield your business from civil judgments and other claims.

Keep Business and Personal Assets Separate

Never mix your personal property with your business assets and vice versa. Doing so could strip away any safeguards you’ve built up. For example, if you have a limited liability company, your personal property generally is protected from claims against the business. However, if you commingle your personal accounts with business accounts, they both will be vulnerable if the business gets into trouble.

Consult with an attorney

It’s easy to ignore the fact that assets may be vulnerable to claims – until those claims arrive. And then, in some cases, it is too late to set up asset protection strategies. Attorney Bruce Adams is an Alabama attorney who knows how to listen to his client’s business concerns and provide actionable advice. Please contact Bruce at 256-237-3339 to set up an appointment. Our office is located in Anniston, Alabama, but we assist clients in surrounding communities like Gadsden, Hoover, Talladega, Vestavia Hills.