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Asset Protection Strategies

Asset Protection is based on strategies for protecting wealth.

What is Asset Protection?
If you think about it, it is nothing new; wars have been fought over assets.  In theory is that it is basic risk management.  Risk equates to failure.  If you buy a lottery ticket, you might win; but in general you consider it a risk and plan to lose or by way of hope to be lucky.  Would you run your business or your home this way?  The answer is that the sane person would say, not likely; most people do not look at their home as a risky lottery ticket.  This is to say that you practice risk management everyday:  you buckle your seat belt, protect your credit cards or debit card numbers, take your medicine or go to the gym.  These are simple little things that are second nature.

What is an Asset Protection strategy?
Risk management, in terms of assets,means staying ahead of litigators and creditors.  This does not mean dodging them; it means that you are giving yourself equal power.  You need the power of choice and the power of settlement.  This is one of the great advanatages of practicing Asset Protection.  It is not an evasive technique, it is taking advantage of the legal tools given to increase the protection of an asset and taking advantage of taxation benefits.  If you are going to implement an Asset Protection Plan, you should be aware of Asset Protection strategies used for personal and business wealth preservation.

Wealth Preservation
Wealth Preservation is the objective of Asset Protection.  Without a good Asset Protection Plan a person may face a major amount of time and money defending themselves in litigation.  The goal is to deter litigators from outrageous claims by using tools that are legal and allow protection.  Some may look to loopholes in the law, but true planning and wealth preservation looks to the protection afforded by law.  There are three sides in law, the defense, the complaint and then there is the real story or the truth.  Court battles often become legal and technical battles over assets and fairness and justice are only one small part of a very big picture in litigation.

To effectively preserve wealth a person must protect and safeguard from the unforseen.  In essence, Asset Protection Planning is protecting from creditors, accidents, volitile market swings, litigators and changing legislation.

Wealth Accumilation
How does a person accumulate wealth? One easy answer is by managing risk.  Carelessness rarely generates wealth.  Planning the proection of assets is a very important step of the process in Wealth Accumulation.  Do you lock your car?  Yes, you do because you car about your car and what is inside.  If you did not care, you probably would not lock your car.  Accumulating wealth in the strategic meaning is like this.  You must find a vechicle that is safe and lock it up, not leaving it in harmsway.  Your exposure to risk should be minimal and something that you can withstand if the unthinkable and unforseen happens to you.

Simple Practice Tips

• Divide and Conquer Asset Liability
• Lock and Load - Lock the safeharbor and load up what is safeharbor
• All assets are not created equal and all techniques are not created equal - to say a trust is a trust, is not true!  Not all trusts and protection tools provide equal protection.
• Always have adequate insurance
• Always protect pensions and IRAs
• Know the difference in the results when comparing techniques - sometimes tax saving tools are not Asset Protection tools

Tax Efficiency
The first step in tax efficiency is to pay your taxes; this means your due share and on time.  Many little tricks wind up getting people in trouble with the IRS and in the end, they do not pay off.  The IRS clearly outlines in the IRS Tax Code, what a person and business can do and what they cannot do.  Only occaisionaly does the code get contested in court. 

The word tax haven has become a derrogatory word.  It connotates that people are avoiding taxes.  It is better said that there are some very good policies when dealing with tax efficiency.

• Get expert adivce - an expert account can save you money and protect you from the IRS in the event of dispute or audit
• When dealing offshore use an OFC - Offshore Financial Center
• Get an expert Planner who does not object to working with a team and who has knowledge of the scope of Wealth Preservation
• Do not sacrifice Asset Protection to save a few dollars on taxes - always limit exposure to risk
  
  

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