Asset protection is the means that can legally be used to shield individual or business wealth from civil claims by creditors. The term "asset protection" denotes the techniques that may be employed without breaking the law, and do not include illegal activities like fraud, perjury, contempt of court or tax evasion.
Asset protection is a branch of debtor-creditor law that allows several strategies for denying creditors access to certain kinds of wealth. These strategies are usually employed before any claim can be made and are, therefore, proactive. Bankruptcy, which is similar to asset protection, is employed after creditors make claims, and is therefore reactive.
Individuals or businesses wishing to engage in legitimate asset protection from the outset may practice accounts-receivable financing, or may establish family limited partnerships or specific asset protection trusts.