If you ask the average person in Minnesota what asset protection is, you’ll most likely get a blank stare in response. Most people don’t know much about asset protection, and even if they have heard the term, it is not something they probably believe applies to them, or something they believe only applies to wealthier people.
While asset protection strategies are most commonly employed by those with a high degree of wealth, many asset protection strategies are also available to those of more moderate wealth. Here are a few commonly asked questions that can help you get a better understanding of what asset protection in Fertile Minnesota is, how it works, and why you might want to include it as part of your estate plan.
Asset Protection in Fertile Minnesota FAQs
What is asset protection?
Essentially, asset protection is a strategy or a process. Through that process you will evaluate the assets you have and determine what asset protection strategies are available to you to protect those assets in the future.
What am I protecting my assets from?
Most asset protection strategies focus on protecting your assets from creditors. Creditors are anyone who seek to take your assets to satisfy a judgment for a debt you owe. These judgments can arise out of any number of situations, but are most commonly caused by lawsuits.
Who would want to sue me?
That depends on your situation. Every driver, for example, has to carry automobile insurance to protect against damages they might cause in a crash. Automobile insurance, as well as other forms of insurance, is one type of asset protection.
In other situations, someone might sue you. For example, a house-guest who is injured on your property, or a client who suffers harm because of the actions you take through your business, could sue you and win a judgment. In short, there are any number of ways you can expose yourself to a lawsuit.
What do I need to do to protect my assets?
That depends on the types of assets you have and the kind of protection you want. In some situations, acquiring the right variety of insurance coverage can be enough. In other situations, however, you may need to take more advanced steps, such as creating a business structure or irrevocable trust.
But I already have a living trust. Isn’t that enough?
No. This is one of the most commonly held misconceptions about asset protection. A revocable living trust does not do anything to help protect your assets for future creditors. While your trust is good for avoiding probate, you need to consider other steps if asset protection is important to you.
In short, you want to speak to your estate planning lawyer about your estate planning and asset protection options.