The protection of judgments and creditors' assets obtained from “life insurance” and “annuity”
Creditors and judgments are facts in life, especially if you are rich. The more money you make, the more people will try to ask for more. There are many customers who come to us and want to protect their assets from judgments and liens. At the same time, they hope to continue to increase their wealth for the rest of their lives. The benefits are important to them, but so are legal protections.
That's why many of our customers use life insurance and annuities as part of their asset protection strategy. Life insurance and annuity insurance are not affected by most judgments and liens. Although the laws of each state are different, these insurance benefits are often considered uncollectible assets. As a matter of policy, they also bypassed the probate.
If protecting your assets from creditors is your goal, then life insurance or an annuity may be your ideal financial tool.
Skip the will with contractual obligations
One of the benefits of using insurance and annuities is that they bypass the testamentary certification. When you die, most of your assets will be certified by wills, and your will will determine how they will ultimately be disposed of. However, life insurance and annuities do not do this. This is your contractual obligation between the insurance company and the beneficiary. Therefore, funds for these policies will not enter your real estate. This is very important because anyone who makes a judgment or debt to your property will be able to use its value to prove that you have the cost of paying for the asset. For example, a life insurance policy is not considered part of the estate in the court of inspection and therefore cannot be recovered. But life insurance doesn't just protect your money when your real estate is settled. It can also be used to protect your assets while you are alive.
How life insurance policies protect your wealth
In the case of judgments and liens, recoverable assets are any assets whose cash value is not protected by law. In most cases, these assets can be used to sell cash. Therefore, real estate, stocks, bonds and other investments are considered recoverable assets. If you are sued by a creditor, these assets may be processed to satisfy the judgment. Some things are in the "cannot be collected" range. There are insurance policies and annuities. In many states of the United States, annuities and life insurance are considered protected assets. Different states may protect different amounts of these policies. In some states, the cash value of the policy is protected. In other cases, only the benefits paid to the beneficiary are protected. Finally, in the best of circumstances, all funds from the policy are protected.
However, if you are in a state where life insurance and an annuity are considered recoverable, you may want to consider using a trust. The trust helps provide additional insulation to the account by removing funds from your name. As long as the trust is irrevocable, most countries believe that the assets in these trusts cannot be used to satisfy judgments or debts. Of course, the key to asset protection is preparation. Life insurance is one of the best products to buy when you don't need it. It is no exception to being part of asset protection.
When do you need asset protection?
The answer is as early as possible. Almost all customers have assets that need protection, even those of the middle class. Although the basics of life, such as the house you live in and the car you drive, may be safe, many of your investment and cash accounts are not. This is true of any vacation property. The key is to use life insurance and an annuity to protect these assets before you need them. Once you are the subject of a lawsuit, moving these funds should be impossible. In some cases, if someone has enough assets, the court will prevent them from moving them when they are about to make a decision.
People often don't plan to do this because they think it's unlikely. The problem is that we live in a society where litigation often occurs. The richer you are, the more likely people are to try to claim that you owe them money. Even if someone falls or falls in your yard, or claims to have stolen a customer's former business partner, it can cost millions of dollars. No one wants to be the target of a lawsuit or creditor, but the planners tend to do better in the long run. We use life insurance and annuities as a way to protect the assets of our customers during and after their lives. Our strategy can help our clients reduce the risk of asset loss while ensuring that they are also building heritage. For more information about our asset protection strategy, please contact us immediately at 212-484-9888.