Asset Protection – the word sounds like it has something to do with businessmen, high net worth individuals, and wealthy families only. This is a misconception. You need asset protection, even if you are a small business or an individual.
Sound asset protection strategies can protect your assets, but you need professional help. At Heroes Financial Group, we have experts who can help you by identifying the risks and creating customized asset protection in Phoenix tailored for you.
What is Asset Protection?
It takes years to build assets. Be it jewelry, land, or buildings, it takes years of hard-earned money to build great assets. Thus, you need financial tools to safeguard your assets. But first, asset protection, by no means, means hiding the assets. Instead, it refers to careful planning and establishing tools that will help you not lose your assets in case of any unwanted events.
Asset Protection Strategies You Should Know
Here are some asset protection strategies that can help you keep your assets protected.
Asset Protection Trust:
Asset protection trust is a foolproof way of protecting your assets. First, you create a trust and transfer your assets in its name. Though you are not the legal owner of the assets anymore, you can still control them through the trustee.
How does it protect your assets? If an asset is not in your name anymore, creditors can’t get their hands on them, and courts cannot seize them, as it can’t be counted as yours anymore.
There are two types of trusts that you can create. One is the domestic trust, which might be more economical but penetrable. In the US, several cases of attorneys dragging domestic trustees through the court. As against them, offshore foreign trusts are hard to touch. Courts don’t have any jurisdiction over them and thus offer multiple layers of asset protection.
You should know that retirement accounts are untouchable. No lawsuit, creditors, or even bankruptcy can claim your retirement benefits. Be it an employer-sponsored plan, or one you bought with the help of a retirement planner, it cannot be attached to settle your debts.
Creditors knock on your door when you have outstanding liabilities, but what if those liabilities are insured? Liability insurance covers the expenses you must pay a third party in case of a claim. It includes auto insurance, homeowners’ insurance, commercial liability insurance, personal liability coverage, etc. If you settle your liabilities through insurance, your assets will remain untouched.
Contact our expert today to learn more about asset protection in Phoenix.
Limited Liability Company:
As the name suggests, a limited liability company is a type of organization that is a fusion of a private company and a partnership. A limited liability member has a limited liability towards the company creditors. Both are separate entities; thus, a partner need not pay any expenses from his pocket.
Create a limited liability company to protect your assets. The assets should remain in your name; thus, no creditor can touch them, as they are only entitled to what the company pays out. Even if a lawsuit Is brought against the LLC, the court cannot attach your assets.
Transfer The Ownership:
It is not the safest way to protect your asset because it depends on your relationship with the person in whose name you transfer the asset. For example, in the case of transferring an asset to your spouse, your spouse will be the legal owner, but no CGT will arise as you didn’t part with the asset.
But it is not possible to transfer liquid assets. Thus, a retirement account is the best choice for them.
To protect your liquid assets, a life insurance policy is one of the best ways. The cash value of the life insurance policy is completely protected under Arizona law after the policy has been in force for two years.
After the insured’s demise, even the life insurance proceeds shall be protected.
A prenup is a good choice for high-net-worth individuals. It sounds insulting to your partner, doesn’t it? But it protects both of you.
Yes, you are in love, and you know they won’t rob you of your property; you never know how things will turn out. A prenup protects the assets that you owned before your marriage. In case of a nasty divorce, your spouse won’t be entitled to half of them as per the divorce laws. As Arizona is a 50/50 property law state, you must be cautious.
Asset Protection in Phoenix
The strategies you read above are not mutually exclusive. Besides, not all asset protection strategies suit every individual. Consult our experts at Heroes Financial Group for asset protection in Phoenix. We excel at creating the best and customized asset protection plans.
Contact us today for more details.