Asset protection helps legally retain assets without engaging in illegal practices (hiding assets), fraudulent transfers, tax evasion, or bankruptcy fraud. Experts advise that asset protection is most effective when started before a claim or liability occurs, as it is often too late to begin any worthwhile protection after the occurrence. event.

Some popular methods of asset protection include asset protection trusts, accounts receivable financing, and family limited partnerships (FLP).

If the debtor has few assets, bankruptcy may be considered a more favorable path than establishing an asset protection plan. However, if the debtor has significant assets, proactive asset protection is often recommended.

Leased jointly owned property can be a form of asset protection. Married couples who have a common interest in a leased property will be jointly liable for claims relating to the entire property and not just a portion of the property.

Joint ownership of a property means that if a lender wants to make a claim against one person, it cannot assign that joint property when claiming a debt. If the lender wants to make a claim against both of them, then according to the regulations, the property can still be taken by the lender.

Some asset protection efforts include having a familiar member or other trusted partner take ownership of the assets or finances. For example, an heir may be gifted ownership of real estate or other assets while the actual owner continues to reside on the property or use it.

This can cause difficulties and complications for those who want to appropriate property, because actual ownership needs to be clearly determined. Financial accounts may also be held in offshore banking entities to avoid paying taxes on those funds.