Blog Post

Who needs asset protection? Maybe you

Ryan Scharber • September 27, 2022

Asset protection is by no means the exclusive domain of the rich and famous; its value can apply to a diverse range of situations and wealth levels.

Ryan Scharber

By Ryan Scharber


When you established your will or trust, you took a major step toward ensuring that your assets will be properly preserved, managed, and distributed after your death (or if you become incapacitated).


However, unless it includes extraordinary provisions, your estate plan probably does not protect your assets from lawsuits, creditor claims, or many other threats.


If you can envision even one scenario under which your personal wealth could be threatened by the actions of a plaintiff, creditor, government agency or other predator, you may be a candidate for a higher level of planning under the broad heading of “asset protection.”

Asset Protection Candidates. Asset protection strategies can be beneficial to people in a wide variety of circumstances, including the following:


  • business owners in high-risk, high-liability industries (e.g., manufacturing, medical supplies, pharmaceuticals, transportation, construction, retail, commercial real estate, insurance, business services, lending, securities, investment, mining, real estate development);


  • owners of businesses that deal directly with the general public;


  • business owners and employers who may incur personal liability for business obligations, such as wage-and-hour and HIPAA claims;


  • healthcare professionals;


  • major borrowers;


  • attorneys, accountants and other professionals who are vulnerable to professional liability claims;


  • corporate board members and officers;


  • owners of “dangerous assets” that pose a threat to the physical safety of another individual (including relatively passive assets, such as real property, and assets that pose a more direct threat, such as motor vehicles, equipment or property for rent, contaminants, explosives, etc.);


  • owners of businesses that produce or use intellectual property (logos, photographs, illustrations, written text, proprietary processes, etc.);


  • owners of businesses that own related assets (e.g., a company that directly owns trucks and the real property where the trucks are parked and/or maintained);


  • owners of multiple businesses;


  • general partners in a real estate or other partnership;


  • any persons and families who have unprotected cash, investments, business ownership or other assets that would be at risk in a lawsuit;


  • parents of teenagers or dependent adult children;


  • individuals who have a history of failed marriages;


  • high-profile individuals and public figures (e.g., athletes, entertainers and celebrities) who might be perceived as having substantial wealth or liquid assets; and


  • private citizens whose high net worth makes them a target for creditors.


Risky Situations. If any of those descriptions apply to you, you are a likely candidate for asset protection. If you’re still uncertain, another way to evaluate your wealth exposure is to answer the following easy questions. A “yes” answer to a few of them could warrant a consultation with an asset protection lawyer:


  • Do you have a net worth over $2 million?


  • Do you have liquid personal property with a value of more than $1 million?


  • Do you consider financial privacy to be a priority? That is, do you want to keep your ownership of certain assets from being made public?


  • Have you recently sold a business, received an inheritance, or experienced a financial “windfall” for which protecting the proceeds is a priority?


  • Are you about to get married?


  • Are you a guarantor, indemnitor or surety, where your liability is contingent on the character or financial health of others?


  • Do you have children who are prone to risky activities?


  • Do you have disabled or special-needs family members?


  • Are you a lessor of equipment or commercial property?


  • Are you a residential landlord?


Asset Protection Tools. In the real world, asset protection defies “one size fits all” generalities. An effective plan is extremely situation-specific and must reflect the nature and value of your property, the most likely threats to your wealth, your marital and family status, your objectives in pursuing a strategy, and more.


An asset protection plan is likely to include some combination of these and other tools:


  • domestic asset protection trusts;
  • retirement accounts, including 401(k)s and non-inherited IRAs;
  • LLCs and limited partnerships;
  • gifting of assets into irrevocable trusts;
  • transitioning non-exempt assets into exempt assets;
  • life insurance and annuities;
  • property and casualty insurance;
  • corporations, including professional corporations; and/or
  • international or “offshore” investment structures.


Exploring the Possibilities. It should be apparent, from reviewing the risk scenarios described above, that asset protection is by no means the exclusive domain of the rich and famous. Equally important, in most cases it does not require a major investment.


To discuss your asset situation and the risks you wish to avoid, contact Ryan Scharber at 480-345-8445 or by email to schedule an appointment.

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