Protecting your assets

What assets can be protected?
To understand what assets can be protected, it is crucial to understand and define what
asset protection is. It is a concept as well as strategies for guarding one’s wealth,
property and other similar assets against creditor claims. In the unfortunate circumstance
that you are sued, losing a legal dispute or just facing the process could have the great
potential to cripple one’s finances.

Some attempts at asset protection include putting the property or financial resource in
the name of a familiar member or other trusted associate. For example, an heir might be
gifted ownership of real estate or other property while the actual owner continues to
reside on the property or make use of it. This could complicate efforts to seize property

as actual ownership must be determined. Financial accounts may also be domiciled
in offshore banks to legally avoid paying taxes against those funds.
Additionally, various investment accounts, such as individual retirement accounts, carry
a certain amount of protection in the interest of justice. Federal laws protect numerous
retirement plans, but many states also offer asset protection trusts that
safeguard homesteads, annuities, and life insurance.

Here are some examples of the most common assets that are to be protected:

• Property
  Property is the main and most protected form of asset. There are two different ways in
  which a property can be owned jointly;
  • Joint Tenants – This is when one party dies and their share automatically passes to the
    surviving joint owner, irrespective of what their Will states. The surviving joint owner will
    then own the house in full and can dispose of it however they wish during their lifetime
    or on their death.
  • Tenants in Common – This is where each party has their separate share of the
    property which they can leave in their Will to whomever they wish, regardless of whether
    they die first or second.

• Protection from care fees
  When discussing the older generation, it is important to make note of the possibility of
  their entering into a care home. It is understandable to have a fear that their home and
  savings would be taken away from them to pay for their care.

  At the moment, if a person enters full-time care and they have property, savings &
  investments worth more than £23,250 then, generally, they will have to pay the cost of
  their care themselves (figures correct as of 2017/2018). More often than not couples
  make Wills that leave their whole estate to each other on the first death. This means

  the survivor then owns everything. The problem with this is if the survivor goes into a
  care home all their assets, including those of the deceased, can be taken into account
  towards their care fees.

  Asset Protection Trust Wills can ensure that your partner can still use and benefit from
  your assets if you die first, but if the survivor does ever need full-time care, your assets
  will not be used to pay for it.

• Second relationships
  It is common for a couple to make Wills leaving their estate to each other on their first
  death and to their children or another family on the second death. However, this may not
  be suitable for couples who are in a second relationship, particularly if they have
  children from a previous relationship. If a couple makes a will leaving their assets to each
  other on the first death, then the survivor will own all of the combined assets.

The problem with this is the survivor is free to change their Will at any time and the first
parties chosen beneficiaries could be cut out completely. The survivor could remarry
which would mean their Will would automatically be revoked and, again, the chosen
beneficiaries of the first to die will lose out.

Asset Protection Trust Wills can ensure that your assets, or share of joint assets, are
received by the beneficiaries you choose, regardless of who passes away first.

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