Asset protection planning is the same, take your chips off the table at the good times, so that you can walk away from the table as a winner no matter what happens in bad situations. The people who worry about asset protection are those likely to get sued. Think of obstetricians and, recently, real estate investors. But the average folks often get caught in difficult situations, and that’s why the topic of asset protection should at least cross your mind.
The asset protection planning facilities are usually provided by the debtor’s side of creditor-debtor law. While most creditors are concerned about the techniques and strategies of collection, the debtors are interested in the techniques and strategies for protecting their most valuable assets from any potential creditors.
The following two rules should always be kept in mind:
1. Start Making a Plan Before A Claim Arises
You can do many things that will effectively provide you with asset protection before a liability or claim arises, but there will be a few things that you can do afterward. Moreover, the point that a claim arises is earlier than any layman might think-it is usually way earlier than when a process shows up or you receive a demand letter
2. Late Asset Protection Planning Usually Backfires
Conducting asset protection planning after a claim arises is going to make matters worse; take it as getting a flu shot while you already have the flu, and the flu shot itself making you feel even woozier. It is a very common misconception that the only thing a judge could do is to unwind a fraudulent transfer, thus leaving the debtor who unsuccessfully tried late planning would be worse off than if he had done nothing.
Both the person who assisted in the fraudulent transfer and the debtor can become liable for the creditor attorney fees, and thus the debtor can lose hope of getting a discharge in bankruptcy.