Asset protection is the legal action taken to protect your assets from creditors, divorce lawsuits, and judgments. For the most part, we consider a person’s needs to determine the best angle or solution when it comes to asset protection. For children, it is often protecting them from creditors and divorce lawsuits. Older clients typically seek to protect money from expenses that can deplete funds such as arrangements in a nursing home for a spouse or themselves.
Many clients have asset protection due to high-risk jobs such as attorneys, dentists, nurses, doctors, and similar fields that may face a high risk of lawsuits and malpractice. While no one intentionally makes mistakes, it is crucial to protect the things that are important to you and your family.
If you are a parent to children who are not financially responsible, it is wise to have asset protection that will give your children the ability to receive their inheritance with the stipulation that they cannot use it all or spend it all at once. Asset protection plans can vary, and when you meet with a member of our team, we will create a custom plan for your specific situation.
Yes, the law allows you to create all kinds of plans to shield your assets. Not only can you plan here in Texas, but you can plan in other states to shield your assets in other ways. To learn more about this type of planning, call our office at (281) 218-0880 and ask about our Domestic Asset Protection Trusts.
Texas also has an excellent creditor provision and better asset protection in our bankruptcy laws than the federal statutes. When filing for bankruptcy, in some cases it can be better to file in Texas in order to use the Texas bankruptcy rules instead of the federal rules.
In Texas, it is a privilege that a lot of assets are automatically protected, such as your homestead, retirement, and one car per person. The bankruptcy code has a thorough laundry list of assets that can be protected – even down to how many cows, goats, chickens, and guns. For the most part, almost everything can be protected as long as you do not have a pending lawsuit. Those who put a plan in place for asset protection while a lawsuit is pending can be liable for defrauding creditors.
The best time to start planning for asset protection would be if you have an inheritance or money in the bank that you want to protect. Usually, investment accounts are also at risk.
The key is to have a knowledgeable and experienced attorney to help you put a plan in place and to visit every two to three years to review your assets. At Your Legacy Legal Care, we remind you when it is time to review your plan to make sure everything will still work as intended with any new legislation or assets acquired. We always recommend to begin your asset protection planning before it is needed – you never know when a lawsuit, divorce, or the need for long-term care will arise.
To learn more about how our team can assist you with asset protection, schedule your strategy session here or give our office a call at (281) 218-0880.
Kimberly Hegwood is the Managing Attorney of Your Legacy Legal Care, a Houston estate planning law firm. With more than 25 years of experience practicing law in Texas, she represents clients in a wide range of legal matters, including elder law, asset protection, estate planning, Medicaid crisis planning, probate, guardianship, and other estate planning practice areas.
Kimberly received her Juris Doctor from the South Texas College of Law and is a member of the State Bar of Texas.
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