Where possible, you may want to discourage people from filing litigation against you in order to protect your own wealth. Asset protection planning can be considered your last line of defense for predators filing lawsuits or creditors pursuing your personal assets. Before people take any steps to insulate their wealth legally, make sure you have considered all potential benefits of liability insurance.
No one wants to face the uncertainty of lost personal assets if you get sued, and asset protection planning is a legal process that helps with that.
The strongest asset protection plans are those developed by a qualified estate planning attorney and never end up contested. This is because the mere existence of an asset protection plan avoids litigation, or when cases emerge, everything gets settled prior to any judgment.
A creditor filing against someone who has an asset protection plan has to succeed in court, but may also be asking questions around whether or not they’ll even be able to receive that judgment should they win. Due to the high levels of uncertainty about the ability to collect the judgment, it is increasingly likely that a favorable settlement for the defendant will come forth prior to going to trial.
Good asset protection planning, therefore, helps to promote the very concept of settling. It’s very important to work with a qualified asset protection planning lawyer to develop your own plan and to cover all of your bases.