WHEN CAN YOU PROTECT TRUST ASSETS?
You can protect assets at any time prior to pledging the assets or incurring obligations that could be affected by transfer of the assets.
For example, you could protect thousands of dollars of assets, even if you had debts of $20,000, providing it did not make you incapable of paying the $20,000.
if you are expecting a lawsuit for something that has already happened or back debts, a transfer of assets from your ownership may not be effective, and could be reversed. Worse yet, if you transferred the assets to a friend or relative, they automatically become obligated for the debt as well. Their bank accounts could be legally seized, their credit score affected, or they might be forced into civil court, bankruptcy, or a criminal court.
You should protect your assets before marriage, before starting a business, before getting sick, or before you could acquire problems. Since more than half of all marriages fail, your trust plan could retain separation of the assets and prevent losses after a failed marriage. It's expensive to finance arguments regarding assets you used to own. A marriage, like other legal partnerships can make divisions of assets into legal disputes. Same thing for other business ventures. Protect assets before partnering. Protect assets before health problems arise with large unexpected medical costs.
Although it may sometimes be effective, creating asset protection after problems develop is not considered planning, it's considered damage control.