Protecting your assets from the claims of creditors is an important, but often overlooked, aspect of estate planning. Texas law provides you many legal ways to protect your assets from creditors and predators.
Family Asset Protection Planning is the proactive process of anticipating and preparing for catastrophic lawsuits. It’s planning that protects your property and other assets from the consequences of any judgments that may result from lawsuits and judgments.
Asset protection planning is about discouraging lawsuits and making it harder to collect from you if a court enters a judgment against you. It may even help ensure that you don’t lose assets in a divorce decree.
Asset protection planning is NOT about trying to avoid your legitimate debts. It is NOT about shirking your responsibility when your actions or omissions cause harm to someone or their property.
There is a belief that asset protection planning is something only the very wealthy need. Nothing could be further from the truth. Asset protection planning is essential for those of modest wealth because judicial judgments will take a relatively bigger bite of a modest estate as compared to a wealthy estate.
Let’s suppose, for example, that the Smith family’s estate is worth $350,000. The Jones family’s estate is worth $2.5 million. Each family is sued, loses, and has a judgment entered against them for $500,000. The judgment against the Smith family is for more than they are worth. Even after paying everything they can, they will still owe their judgment creditor money. The judgment against the Jones family represents only 20% of the total value of their estate. After paying the judgment, most of the Jones family’s estate is still intact.
As you can see from this example, asset protection planning is critical for families with modest wealth.
Creating a Family Asset Protection Plan is an investment, not an expense. And, you need to get your plan in place as soon as possible to protect your family’s assets.
Call us at 254-233-7300 to schedule an appointment to talk about your asset protection planning needs.