How can I protect my assets from future creditors?
Imagine this: You’ve been working for 30+ years. Your house is almost paid off and retirement is on the horizon. All of a sudden you blink and… BAM! All of your assets are gone. Sounds like something out of a nightmare, right? Asset protection isn’t just for doctors, corporate executives, or others who work in high liability professions. Anyone with assets is at risk of losing them. Your assets may be in danger if you file for bankruptcy, get a divorce, or are the defendant in a civil lawsuit. Although these events are often unpredictable and unforeseeable, a little bit of planning can go a long way. Here are three different ways that you can protect your assets from future creditors:
- Utah Asset Protection Trust
Utah’s Asset Protection Trusts are some of the most effective in the country. A Utah Asset Protection Trust is an irrevocable trust where you are both a co-trustee (which means that you can manage the trust and make decisions) and a beneficiary (which means that you can still use the assets). As long as the trust requirements are satisfied, your assets will be protected from any future creditors.
A Utah Asset Protection Trust might be right for you if:
A Utah Asset Protection Trust might be right for you If you’re a Utah resident who works in a high liability profession (think: doctors, dentists, lawyers, engineers, etc.), if you’re a Utah resident with high net worth, or you’re a Utah resident who just want to make sure that your assets are totally secured. (Seriously, the Utah Asset Protection Trust is great for just about anyone.)
What an Asset Protection Trust can’t do:
An Asset Protection Trust can only protect your assets from future creditors, it can’t protect you against the creditors that are already knocking at your door. If you’re wondering how you can find relief from current creditors and keep your assets, you can speak with one of our bankruptcy attorneys at 801-899-6064.
- Personal liability insurance
What if your normally friendly poodle bites the babysitter? What if your elderly neighbor slips while going up your front steps? You can’t prevent these types of accidents, but you can mitigate the risk. Personal liability insurance protects you if you injure someone else or damage someone else’s property. This type of insurance is also known as “third party insurance” because it’s there to cover you if someone filed a lawsuit against you.
Personal liability insurance might be right for you if:
Personal liability insurance would work for a W2 employee who wants to protect against daily injuries.
What personal liability insurance can’t do:
Personal liability insurance can’t protect you in the event of a bankruptcy or a divorce. Personal liability insurance also won’t protect you if work in a high liability profession and you are sued during the course of your job.
- Divide the assets between the husband and the wife
Let’s say that you’re a doctor but your spouse is a stay-at-home parent. You’re more likely to be sued because of your profession, but your spouse isn’t. For this type of asset protection planning, you divide up the assets between the “safe” spouse and the “risky” spouse. Under this type of plan, you might keep your junky 2004 Mercury Mystique titled in your name (remember, you’re the risky doctor) and you title your house and your much nicer 2016 Honda Odyssey in your spouse’s name.
Dividing up the assets might be right for you if:
You’re married. Between you and your partner, you have a “safe spouse” who probably won’t be sued and a “risky spouse” who might be sued because of their profession. You’re terribly in love and can’t foresee a divorce in the near future. You’re also willing to take a little bit of a risk (remember, your elderly neighbor could still slip on your front porch and sue your stay at home spouse). You don’t foresee a circumstance where you both would have to file for bankruptcy.
What dividing up the assets can’t do:
Dividing up the assets can’t protect you in event of a divorce and it can’t protect you in circumstances where your “safe spouse” could be liable (think: elderly neighbor slips on your front porch or Poodle bites the babysitter). While dividing up assets might be beneficial if one spouse has to file for bankruptcy, it can’t protect you both need to file.
To learn more about asset protection or how you can keep your assets while going through bankruptcy, give us a call at (801)-899-6064. This blog post does not constitute legal advice, please consult with your attorney before beginning an asset protection plan.