Asset protection trusts — both offshore and domestic — can be effective vehicles for protecting your wealth, particularly in today’s litigious society. But these trusts can be complex and expensive, so they may not right for everyone. If you are seeking simpler strategies, there are a number of basic, yet effective, tools to consider. Some involve transferring assets to another person or entity, or changing the way property is titled.
Here are a few common strategies:
Insurance: For many, insurance is the first line of defense against liability claims that expose their assets to risk. Insurance products include personal or homeowner’s liability insurance, as well as professional liability insurance for doctors, lawyers, and other professionals who are frequently targets for lawsuits.
Lifetime Gifts: The most effective strategy may also be the simplest: giving your assets to your children or other loved ones. Creditors cannot come after assets that you don’t own. The disadvantage is that you must relinquish control over the assets.