Taking steps to protect your assets

As the name implies, creditor protection involves taking steps to protect one's assets from collection by creditors. When you owe money and you are unable to pay, creditors may attempt to recoup their losses by laying claim to any assets of value you own, including your home, automobiles, and other items of monetary value. If they win a judgment, they can force you to sell your home or other assets to repay debt, or they may simply seize items. Neither outcome is desirable, especially if you plan to pass along your assets to loved ones as an inheritance down the road. In other words, you need to engage in asset protection now in order to avoid claims by creditors later.

Family trusts can provide protection

Family trusts provide one of the best forms of creditor protection for the average person. If you were to eventually owe significant debts related to your business, there are other options. You can, for example, set up a corporate structure of some sort to separate your personal and professional spheres. In most cases, this will create a barrier that shields your personal assets from claims by business interests. Still, this won't protect your assets from personal debts, and it's no guarantee against claims by creditors. Family trusts allow you to continue enjoying your personal assets even though they are no longer in your name, but are instead held legally by the trust for the benefit of named beneficiaries.

Your home is likely to be your most valuable asset

When creditors come in search of assets to claim for repayment of debt, the first item on their list is usually your home since it tends to be the most valuable asset owned by the average adult. Naturally, you want to continue living in your home and you would probably like to preserve your primary residence for your family. A family home trust that holds your property in reserve for named beneficiaries (a spouse, children, etc.) can stop creditors from laying claim to this major asset both during your lifetime and after your death.

You want to be protected well before you have any creditor risks

This is not to say that there aren't instances in which a trust could be deemed invalid. If creditors are knocking down your door and you attempt to evade them by setting up a family trust of some sort, chances are a judge will see through your ploy. But if you are making payments on your debts in good faith at the time you set up a trust and you are later unable to pay due to unexpected circumstances, such as injury, illness, job loss, or death, you're probably in the clear. If creditor protection is a concern, gain the peace of mind that comes with protecting assets for your loved ones via family trusts.

So why not learn more and register with TrustUs today.

After all, it's in your hands.