Asset Protection Strategy - Good Deeds Do Get Noticed

October 12, 2004
By Katherine Curtis

Cinderella and her Fairy Godmother were no fools - as they implemented their asset protection strategy with a highly skilled group of mice, their plans kept the evil-doings of her stepmother and stepsisters from ruining her big day.

The horrible risks that Cinderella would have faced had she feebly attempted to outwit the wicked behavior of her stepmother and stepsisters on her own are sad to say.

Perhaps, she could have even lost the right to sit by the kitchen's large hearth after slaving all day at demeaning chores. Fortunately, their strategy worked, with few hitches and set Cinderella free to live the life she fully deserved.

Who's Left Holding The Slipper?
Placing all assets under one name or in one location, never fully protects the owner from loosing all possessions to liability claims or greedy scams. Understanding how to identify one's "dangerous assets", such as high-risk properties, helps the owner choose a strategy to reduce its liabilities. In Cinderella's case, luck - not officially one of the many great asset protection strategies - helped her relocate one precious slipper into the hands of Prince Charming.

Upon the treacherous hour of midnight, Prince Charming was then able to retain the slipper for later use. As is the situation with multiple businesses operating under one unit, the owner should not tie the business management with the ownership of property.

Some examples of high-risk properties are clinics, legal practices, real estate ventures, and future inheritances established by the elderly.

Strategic planning does not magically happen. With the aid of a competent planner or an asset protection team, an owner's assets are outside the grasp of self-serving creditors or excessive taxation. In some situations, strategic planning may involve establishing overseas entities.

Other common strategies include trusts, life insurance, joint ownership, LLC (limited liability company) or incorporation status, and homestead exemptions. Be wise, however, to make use of razor-sharp strategy techniques well before the chimes start striking midnight or your assets may never again appear in the same condition once the bell stops ringing.