A person interested in conserving their assets and conveying them to the next generation may have heard of the concept of asset protection. You will find it is not as simple as giving your assets to the kids and hoping for the best. The tools used vary greatly and one should consider the least costly and most efficient process after evaluation of all the possible solutions. The difficulty is that asset protection can mean a lot of different processes and legal tools, some simple and some very complex. This is an area where expert advice is absolutely required.
The general rule is that your assets should be available to satisfy your expenses and payment of your creditors. In order to shield assets from creditor claims, it is necessary to anticipate and plan in advance the transfer of title to assets before the claims arise. Otherwise, the transferring party has likely engaged in a fraudulent conveyance, which a court can reverse. The various forms in which asset protection can arise might be as simple as incorporation of improvements into personal residential property, placing property in a limited liability company, forming a family limited partnership, creating a domestic asset protection trust, (which is an irrevocable trust), or creating an offshore trust, held in a foreign country.
The complexity and cost of such transactions varies greatly. The right choice takes into consideration many factors, including your age, health, trustee selection, potential beneficiaries, potential liability sources, and goals. When done well, the party creating an asset protection plan can rest knowing that their goal of preservation of property has been accomplished.