Asset Protection Trust – What is it?

Secure the assets with trust

The liability risks in connection with the assets generated have increased significantly in recent years. The stock is no longer threatened only by inflation or taxes, but also by entrepreneurial actions, financings, but also divorce or succession. All these events entail the risk of liability access by potential creditors, as clearly illustrated in the cover story of DATEV magazine 2/2016 . Especially managers or business owners should create conditions at an early stage in order to protect their private assets against unauthorized access by third parties, white lawyer Uwe Martens from Frankfurt /M.

 Design options

This refers to legally permissible designs that serve the purpose of transferring the private assets to family members, a foundation or a trust so as to prevent access by third parties such as banks, the tax office or the ex-spouse or compulsory portion. Asset Protection – German: weath protection programmes – is the magic word here. Segregation of the private assets of entrepreneurial risks can be considered, for example, by means of goods swings or family-owned companies ; but also the transfer of the family dormitory can be an option, as explained by tax adviser Frank Wehr from Munich, Asset protection thus not only serves to hedge against depreciation, inflation or devaluation but rather offers the possibility of protecting one’s own capital from future access by third parties.

 Provide on time

But beware! In order for the business assets and in particular the private assets separated from such liability to be effectively withdrawn in an emergency, appropriate precautionary measures must be taken in good time. It is necessary to set the course early – not only when the child is already in the well, warns lawyer Florian shoe, Frankfurt / M., Based on his experience from the consulting practice. If liability is already evident, such as insolvency, the measures described above can no longer be implemented. The basic prerequisite is, therefore, to complete the foreclosure of the assets before any future risk of liability arises, as lawyer Uwe Martens, Frankfurt / M. explained.

Interdisciplinary cooperation

Forms that serve to hedge private assets in the face of risks that are difficult to predict or threatened with claims for damages have already had a long tradition in the USA and England. In the meantime, wealth protection is becoming an increasingly important discipline in this country as well. However, asset protection is not a separate area of law, but rather an interdisciplinary structure that requires the cooperation of specialized lawyers and tax consultants. In any case, the tax or legal advisor has an exciting, multi-faceted field of activity. Tangible are inheritance and tax law as well as corporate and insolvency law. In order to support property owners in good time, the interdisciplinary cooperation between tax consultants and lawyers is an obvious choice.

                                 Outlook

To have protection and peace for a lifetime does not have to be wishful thinking. Well-advised, properly prepared and implemented with the help of experts, you can succeed in securing your own assets before you know about a lawsuit, threatened with bankruptcy or if you are involved in a business or investment.