What Steps Are Involved In Asset Protection Planning?
The first step in creating your asset protection plan is to consult a well-qualified attorney who actually studies asset protection and has experience creating asset protection plans. Unfortunately, there are a great number of attorneys who know absolutely nothing (or very little) about asset protection planning and yet that does not stop them from pretending to have great knowledge. One of the ways that you can identify such attorneys is to ask them how many asset protection plans they have actually created and whether or not asset protection is a substantial part of their practice. If the attorney has not created any asset protection plans, or has only created a few, then he or she will not be the right person to help you identify your asset protection needs or create an appropriate plan for you.
Step two in the creation of your asset protection plan is to review your finances very carefully and honestly. If you do not have enough income to meet your day to day needs going forward, then it is probably not wise or even possible for you to put substantial funds into an asset protection trust. You need to be able to have sufficient financial power to meet your known and predictable living needs in order to have a viable asset protection plan. Fortunately, if you have some assets, but small income, you may be able to choose to split your assets into funds set aside to meet foreseeable needs, expenses, and small emergencies while choosing to protect another part of your assets. It is not necessary that you be wealthy in order to have a good opportunity for an asset protection plan, but it is important that you be able to pay your own way.
The third step in creating an asset protection plan is to consider carefully how much money you want to protect. It is common among our clients to choose not to protect every single penny. Many clients wish to keep some of their funds instantly available and 100 percent flexible, and such funds would not be appropriate to put into an asset protection plan. Some of those same clients will definitely choose to put a significant amount of their money into an asset protection plan because they want to be absolutely certain that they leave an inheritance for their children. They also want to be certain that there is some money set aside to reduce the misery for their family in the event that a terrible and unexpected incident occurs, such as a health setback or car wreck. Discuss this step very carefully with your asset protection attorney. We have many options and great flexibility in how we tailor asset protection plan, and there is no one-size-fits-all plan. Each individual has a different income, a different amount of savings, different predictable expenses, and all of these factors should be considered.
The next step in creating your asset protection plan is to put your plan into place quickly. It is important to keep in mind that asset protection plans that are not fully implemented are generally useless. You must have not only created the asset protection vehicle, such as an asset protection trust, but you must have also funded the assets into that asset protection vehicle. If a terrible accident occurs before this has been done, then time and money will be wasted. Therefore, once you have created the asset protection plan, immediately put the assets that you want protected into the asset protection vehicle.
The final step in asset protection planning is to regularly check your plan and consider the changes that have happened to your friends and loved ones. Has anyone divorced? If so, does that call for a change to the plan? Has anyone filed bankruptcy? Has anyone been diagnosed with a terrible illness or experienced another life changing incident? Each of these would call for a need to review your asset protection plan and consider whether or not it needs to be adjusted.
For more information on Steps Involved In Asset Protection Planning, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (405) 754-4166 today.
Call For Our Free Probate Book Or To Reserve
Your Seat At Our Free Estate Planning Workshop