Is Putting Assets in a Spouse or Child’s Name a Valid Asset Protection Strategy?

Is Putting Assets in a Spouse or Child’s Name a Valid Asset Protection Strategy?As with many things, people often see a solution to an immediate issue but do not evaluate the entire set of circumstances to see what other problems might arise or what other long term ramifications there are for such immediate solution. In any form of asset protection, control over the asset is a valid concern and remains one of the trickier points. In the event of transferring an asset to another party where they take outright title and control, the asset effectively becomes their property whether it is through a gift or some other form of transfer. The transferor effectively loses this asset, just as if a creditor won a lawsuit, got a judgment and was able to foreclose upon the asset.

There are many strategies which involve a private transfer where the equity and ownership might vest in another party whether it is a spouse, child or other family member, but the former owner or transferor will retain some level of management, control and possibly income. The key is to structure the transfer so it is done in a proper and legal way which accurately reflects the intent of the parties and protects the asset from creditors.

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