For quite some time, the purpose of asset protection planning has been to lower the profile of assets owned by people. This was done in order to discourage frivolous lawsuits but, today, it has become much more important. With identity theft running rampant, it makes good sense in keeping your valuable assets out of your personal name or from being reported under your social security number, or other identifiers.

When assets are transferred into a trust or business entity, the assets are no longer held, let alone reported, in an individual person’s name. Therefore, it is becomes even more difficult for criminals to find or access either the account information or the assets themselves. Even if an individual’s identity should be compromised and his accounts are accessed, the assets are held in entities should be unaffected and available to be transferred to the individual’s new accounts for bill payment, checking, etc., while the theft of identity is being resolved.

Recently, there was case where a businessman became the victim of identity theft. It was nearly a month before a major bank could investigate the claim and refund the man's stolen money back into his account. Fortunately for the victim, he held most of his significant assets in the names of other entities he owned, and was not inconvenienced by the event.

As you've just seen, asset protection sometimes can be a planning necessity, even when it is not done in contemplation of possible creditors.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.