Asset protection is a set of legal and financial strategies designed to protect the assets of individuals and legal entities from risks such as creditor claims, legal judgments, business failures, divorces, or inheritance disputes. It is not about illegally hiding assets or tax evasion, but rather about legitimate and proactive steps that minimize threats and ensure that assets remain in the owner's hands or are passed on to the next generation according to their wishes.
In practice, a wide range of asset protection tools exists. Basic instruments include prenuptial and postnuptial agreements, which define property relations between partners. For entrepreneurs and investors, more complex structures are key, such as establishing a holding company to legally separate a risky operating business from valuable assets (e.g., real estate). Trust funds or family foundations are increasingly popular, and assets are transferred and managed for the benefit of defined persons (beneficiaries) according to predetermined rules.
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