What is the difference between asset protection and asset preservation?

Asset protection and asset preservation both refer to measures taken to protect assets from creditors and other potential losses. However, they are two different tools that require different strategies when implemented. Asset protection is the process of reinforcing an asset’s protection from creditors and potential losses. It involves the implementation of various strategies, such as creating an offshore trust or a limited liability company, to help protect an individual’s assets. Asset protection can be used to protect assets from potential litigation, bankruptcy, or other creditors. Asset preservation is the process of attempting to keep assets from being liquidated or otherwise lost due to creditors or other potential losses. This is essentially a defensive strategy that seeks to keep assets from being taken or otherwise lost. Some asset preservation techniques include setting up trusts or safety deposit boxes and putting assets into irrevocable trusts. In South Carolina, asset protection is governed by the South Carolina Trust Code, which outlines the requirements for valid trusts, how to manage trust assets, and the rights of creditors and beneficiaries. Asset preservation, however, is determined by federal and state tax laws. Many asset protection techniques are also considered asset preservation techniques; however, asset preservation focuses more on techniques that focus on preventing loss or liquidation of assets.

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What is the difference between asset protection and asset preservation?

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