Illinois Estate Planning and Elder Law Blog
Asset protection planning is about protecting your assets from creditors – and it is not just for the super-wealthy.
Anyone can get sued. Lawsuits can stem from car accidents, credit card debt, bank foreclosures or unhappy customers. If someone wins a monetary judgment against you, your family could become bankrupt trying to pay it off. To keep your assets away from creditors, you need to move them somewhere creditors cannot reach them. Asset protection techniques include maximizing contributions to IRAs, moving funds to an irrevocable trust, retitling various assets or using limited liability companies or family limited partnerships.
It is important to note that asset protection planning only works if you act before you are sued. Under the law, you may not defraud current creditors. If you are already being sued or if you know you are going to be sued and you transfer assets so that creditors cannot reach them, the court will reverse the transfer. That is why it is a good idea to put a plan into place now.
Contact your estate planning attorney for more information.