Asset Protection Planning for the Modern Client

by | May 15, 2020 | Articles

Asset Protection Planning for the Modern Client

Only the very wealthy and those in high-risk professions need asset protection planning, right? That’s a myth.

In reality, we all need asset protection. Why? Because we all can be sued and lose everything we have. A car accident, business failure, foreclosure, medical crisis, or injured tenant can result in a monetary judgment that will decimate your client’s finances.

What exactly is asset protection planning?

In its most basic form, asset protection planning is the process of taking assets that are vulnerable to creditors, predators, and lawsuits and positioning or repositioning them as assets that are less vulnerable or, ideally, are not vulnerable at all.

Basic, everyday asset protection planning

Many of you may already be taking advantage of basic asset protection strategies and not even realize it. For example, the first line of defense against liability is insurance, including homeowner’s, automobile, business, professional, malpractice, long-term care, and umbrella policies.

Another type of basic planning is a joint ownership between married couples called “tenants by the entirety.” (TBE) A creditor of just one spouse cannot attach a judgment to the couple’s tenants by the entirety property. Because TBE benefits will be wiped out if a judgment is entered against both spouses or if one spouse dies, this type of ownership should not be the centerpiece of a married couple’s asset protection plan.

Sophisticated Asset Protection Planning

For those that need to go beyond basic asset protection planning, you must understand that sophisticated planning involves more give than take. Clients must give some, or even all, control and ownership of the property to be protected. Ideally, the spouse, children, and grandchildren will also lack control, but may maintain a beneficial interest in the property such as the right to income and principal for health, education, and maintenance.

To make property untouchable, or, at the very least, more difficult for creditors to seize, sophisticated asset protection planning will often involve a layering of multiple techniques, including: beneficiary trusts, domestic or foreign limited liability business entities, and irrevocable trusts.


We would like to team up with your advisors to offer a comprehensive asset protection planning and are ready to answer your estate planning questions. Please call our office now to set up a complimentary, no obligation meeting.

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