What is the difference between asset protection and estate planning?

Asset protection and estate planning are both legal strategies used to protect a person’s assets. However, there are key differences between the two. Asset protection planning focuses on protecting an individual’s existing assets from creditors who may try to seize them. It is important to note that asset protection can only help protect assets from unsecured creditors who have already obtained a judgment against you. Asset protection planning generally helps shield assets from liabilities that may arise from business transactions, lawsuits, creditors, and more. On the other hand, estate planning is the process of considering how to protect, preserve, and distribute assets during a person’s lifetime and after death. It typically involves creating a will, living trust, or other legal documents, such as a power of attorney and a health care directive. Estate planning can also involve creating strategies to minimize taxes or other liabilities. In summary, asset protection focuses on protecting existing assets from creditors, while estate planning focuses on how to protect, preserve, and distribute assets during a person’s lifetime and after death. In the District of Columbia, both asset protection and estate planning are governed by the laws of the state.

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