An asset protection trust is a tool that is used to hold assets in a separate vehicle so that they cannot be taken by creditors. When an issue arises that could result in a lawsuit, the party seeking compensation will try to sue the party with the deepest pockets. An asset protection trust is an option for assets to be legally held in a separate tool so that the owner can still enjoy the benefits of the assets, but does not have direct ownership. There is both Domestic Asset Protection Trusts (DAPT) and Foreign Asset Protection Trusts (FATP). There are many advantages to an asset protection trust.
Legal Opportunity to Protect Assets
When facing a lawsuit and the possibility to paying a large sum of damages, there may be the temptation to conceal assets. This is illegal, and failure to disclose assets during a lawsuit could be considered perjury. An asset protection trust allows the owner to transfer ownership of their assets and avoid criminal charges. Creditors do extensive research to find assets. If you think that you will be able to successfully hide assets, you are wrong and will likely be caught. It is best to utilize legal means of asset protection.
Becoming a Less Favorable Subject of a Lawsuit
When someone is filing a lawsuit, they are likely going to target the party with the deepest pockets. When your assets are placed in an asset protection trust, you become a less favorable target for lawsuits. If the party being sued does not have assets that are available for creditors, the likelihood of being sued decreases. Plaintiff’s attorneys in civil lawsuits often work with a contingency agreement in place. This means that they do not collect money upfront for work to be completed, but instead will take a percentage of the damages awarded. The plaintiff’s attorney will likely conduct a preliminary search before taking on a case. If the attorney discovers the adverse party does not have assets to collect upon, then he or she is not likely to take the case.
The motivation behind most lawsuits is money. Having less money or fewer assets than other parties involved in a case may put you at an advantage. The less money you have, the less likely you are to be pegged an easy target to collect upon at the end of a lawsuit.
Hire an Experienced Asset Protection Attorney
We live in a litigious society. No one is immune to lawsuits. You do not have to be a billionaire to be concerned with protecting your assets and wealth. Speaking with an asset protection attorney can be a life-changing move. The attorney at the Law Office of Kris Mukherji is a member of the Asset Protection Council. This is a group of attorneys, CPAs, and Financial Advisors committed to asset protection. Contact us today to find out how we can help you protect your assets.Read More