A balance between control and safety must be structured. Tax and financial planning are also part of asset protection. An asset protection plan may increase your tax and reporting burden. Many entities require additional accounting fees, legal costs, forms and returns. Liquidity and return on investment may also be effected.
Insurance achieves asset protection by sharing risk with other parties and risk management.
However, coverage and availability vary and one must be sure that policies purchased cover the risks that you wish to protect yourself against. Gifts can be made to spouses, family members and charities. Legal entities such as corporations and trusts can be used to hold title to assets or operate a business. Such entities are often stacked or tiered creating a layering effect. In some cases, assets are even transferred outside the United States.