There are some different strategies you can implement under the rules and guidelines of asset protection. They can be very useful when you are trying to protect your assets from being seized by creditors. It is to your benefit to implement such strategies instead of attempting to hide the assets you have.
Carefully assess your financial goals and then work to protect your assets fairly from being taken by creditors for circumstances you had no control over. Protecting your financial security is an area you want to begin working on before you find yourself in such situations.
With the right asset protection strategy in place you won't be hiding anything or doing anything illegal in nature. It is important to understand that the IRS has the right to examine your asset protection program at anytime. If there are guidelines not being followed they will charge you taxes on those assets, penalties, and interest.
The first $25,000 of equity you have in your primary residence is exempt under an asset protection program. You must be residing in the home in order for this exemption to apply. There are higher dollar amounts that apply should you be suffering from a terminal illness. Some states allow life insurances policies to be classified under asset protection. Even if the individual files for bankruptcy they can normally consider their life insurance policy exempt.
Annuities can also be part of your asset protection strategy. This includes both fixed and variable annuities. Any tax deferred situations you have set up can also be part of it. The most common one is retirement funds that are taken out of your paycheck and placed into an account on your behalf. Some states do allow the last 12 months of contributions to be accessed by creditors though so you need to find out the specifics for it in your state.
