What Is Asset Protection? Who Am I Protecting My Assets From?

Asset Protection

Asset protection is the legal action taken to protect your assets from creditors, divorce lawsuits, and judgments. It involves assessing a person’s needs to determine the best solution. For children, it often means protecting them from creditors and divorce lawsuits.

Older clients typically seek to protect their money from expenses that can deplete funds, such as nursing home arrangements.

Many clients in high-risk jobs, such as attorneys, dentists, nurses, and doctors, seek asset protection to guard against lawsuits and malpractice claims.

Parents with financially irresponsible children can use asset protection to structure inheritance plans that prevent reckless spending.

Is it Legal to Shield My Assets?

Yes, the law allows you to create plans to shield your assets. Asset protection plans can be structured within Texas or in other states for added protection. Contact our office at (281) 843-5602 to learn more about Domestic Asset Protection Trusts.

Texas has strong creditor protection provisions and favorable bankruptcy laws compared to federal statutes, making it advantageous to file for bankruptcy in Texas in some cases.

What Assets Can and Cannot be Protected?

In Texas, certain assets are automatically protected, including your homestead, retirement accounts, and one vehicle per person. Bankruptcy laws also provide detailed asset protection provisions, covering items such as livestock and firearms.

However, attempting to establish asset protection while facing a lawsuit may be considered fraud against creditors.

When Is the Best Time to Start Planning?

The best time to plan for asset protection is before it’s needed, particularly if you have an inheritance or significant bank savings. Investment accounts are also at risk and should be protected.

A knowledgeable attorney can help create a plan and ensure it remains effective through periodic reviews every two to three years. At Your Legacy Legal Care, we provide reminders to update your plan based on new legislation or asset acquisitions.

Planning early is crucial, as lawsuits, divorce, or long-term care needs can arise unexpectedly.

To learn more about how we can assist with asset protection, schedule your strategy session here or call our office at (281) 218-0880(281) 218-0880.