Deciding whether to develop an asset protection plan or not often depends on several key factors. While everyone can benefit from employing some basic asset protection strategies, some people need them more than others. To determine if you should talk to an attorney about developing an asset protection plan, you will want to ask yourself the following questions.
Question 1. Do you have a lot of wealth?
Regardless of what profession you’re in, what your individual circumstances are, or what risks you might face, people who have a high degree of wealth are much more likely to be sued than those of more moderate means. It doesn’t matter if you acquired your wealth on your own, inherited it, or won the lottery; if you have wealth, you’re much more likely face a lawsuit and have to deal with judgment creditors than others. Asset protection plans for people with high degrees of wealth are a necessity.
Question 2. Are you in a litigious profession?
If you don’t have a lot of wealth but are in a profession where there are substantial liability risks, asset protection is also something you need to consider. Whether you are an attorney, physician, engineer, or contractor, your risk of being sued and losing your hard-earned money is substantial. The proper asset protection plan for professionals often includes an array of options, but having a basic plan in place is very important. Even if you are new to the profession and don’t have much money, you don’t want to get off on a bad start by being subject to a lawsuit and creditor collections.
Question 3. Do you own your own business?
Whether you work in a field that is prone to litigation or not, owning your own business is something that should prompt you to create an asset protection plan. This is especially true if you are a sole proprietor, partner, or are involved in the business that does not afford owners protections against lawsuits that target the company. Should something happen to you, or should an employee expose you to litigation, you could risk everything you have spent your time and energy creating.
Question 4. Do you anticipate potential problems in the future?
The best asset protection plan is one that you have in place before problems arise. While you might be able to protect some of your assets after you’ve been sued or after creditors have tried to take your assets, it’s always better to be able to look ahead at future problems than to have to deal with them after they arise. Such problems can arise from lawsuits, but also from divorces, as well as other unexpected issues.