“There is no such thing as asset protection,” said Jason Cain, head of the family wealth planning group in the central region for Credit Suisse Private Banking USA. “What there is is good business and estate planning that as a byproduct insulates your assets from future, potential creditors.”
Asset protection on the one hand and estate planning on the other; it’s six of one and a half-dozen of the other. In other words, sometimes it’s not the thought of transferring our assets that first moves us toward proper planning, but the thought of preserving our assets long enough to be transferred. The world is a dangerous place, after all, but these are mutually supporting manners of thinking, if you understand your assets well enough.
The topic of asset protection was picked up not too long ago over at the New York Times, specifically from the point of view of a lawsuit in the like-titled article “Safeguarding Your Assets Against the Hazards of a Lawsuit.”
Up front it should be said that insurance can be your first line of defense, and there are as many types of insurance as there are risks. This is a product where one person literally buys piece of mind (assuming you trust your broker) and pays another to accept their uncommon liabilities and costs in exchange for common payments. But insurance only does so much since it simply transfers liabilities without eliminating them, and it doesn’t work proactively on its own; you need to structure your assets. This is precisely the activity that generally runs under the banner of “estate planning,” but it’s important not to pigeonhole one or the other. Proper planning is an ongoing activity in life to further your life goals.
There’s much to do, especially if you have some specific concerns or you’re prone to specific risks. You can learn a bit more from the original article, but in the end your individual circumstances and attendant risks will determine the appropriate asset protection plan for you.
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Reference: The New York Times (November 2, 2012) “Safeguarding Your Assets Against the Hazards of a Lawsuit”