Asset protection is very important to every person who purchases real estate property, whether you're a young single person buying your first home or an established business owner with hundreds of investment properties. Asset protection should always be discussed with a professional who understands your goals and objectives, but it should be someone that you trust because it's easy for estate attorneys to charge thousands of dollars in fees for simple asset protection strategies that you can do on your own or with the help of my team for free.
To help, we've written a lot of our knowledge and experience about asset protection here for your benefit. Everyone should have a better understanding of how creditors can come after your personal assets and lien any of your personal property.
RE/MAX Exclusive Collection has teamed up with the area's top Estate Planning Attorneys and Financial Planners to help educate you on planning for the future and protecting your assets at the same time.
Why is Asset Protection Needed and Recommended?
Let's say that you have a gathering of friends and someone trips and falls in your back yard. Or maybe you get into a fatal car accident and you are found to be at fault. If you're liable for the injury, death, duress, pain or suffering of another person, that person or their family could sue you for MILLIONS - even if you don't have millions! Insurance is fine, but it only pays so much, and once you use for something like this, you'll have a tough time getting insured again without paying huge rates. The first thing that they will come after are your assets. Everything that you own that is in your personal name is an asset, and now this person or their family is entitled to it because of an honest mistake on your part, or even an unavoidable accident.
Who Needs Asset Protection?
Everyone! Anybody who owns anything needs basic asset protection. It doesn't cost anything and anybody can do it with a little research. We provide guidance on this for free to our clients. The important thing is not to be afraid of it; many people are afraid of owning something that is not in their name...but why? There are no risks or downsides - it's simply giving a new name of ownership to your assets. You still control it, but YOU, alone, personally, don't own it. John D. Rockefeller once said, "The secret to success is to own nothing, but control everything."
The people who need asset protection even more than the average person are landlords/investors who own multiple properties (property owners are liable for things that happen on the property and can therefore be sued for something caused by the tenant). If you own even ONE rental property, asset protection should be at the top of your list.
The Basics of Asset Protection
The important thing to realize about asset protection is that these asset protection strategies must be done BEFORE there is something to protect your assets from! If you tried to do asset protection while you were in the process of being sued, you could be convicted of fraudulent conveyance. It's like trying to get health insurance if you know that you have a pre-existing condition.
Owning a property, whether it's your primary residence or one of many income properties, is meant to be an investment. But unforseen crises, frivolous lawsuits and downward housing markets can turn an investment into a money hole very quickly. A solid asset protection plan will reduce your liabilities and enable you to cut your losses and walk away in such an event, with no harm to your other assets.