Beyond Insurance: Asset Protection Strategies for Women

As women continue to work and earn money, become the main breadwinners, and run their own businesses, it's important to take measures to protect your lives, businesses, and simply the things you own. That's why asset protection planning has become so vital for women.

Asset protection planning is the process of arranging your financial affairs to prevent or at least minimize the risk of your assets being used to satisfy claims of future creditors or claimants. Asset protection is not intended to hide assets, defraud creditors, or evade the payment of taxes. In fact, if a court finds that your asset protection plans were made with the intent to defraud, it will disregard those plans and make the assets available to creditors.

Why is asset protection planning important for women?

Women, now more than ever, need to consider asset protection planning because:

  • Women live longer than men and will likely need their money to last longer
  • At some point in their lives, women may have to manage their own finances due to divorce, widowhood, or remaining single
  • Many women are successful business owners
  • A good asset protection plan can help you achieve financial security and independence, and give you an opportunity to have enough money to provide for your comfortable support and that of your dependents

Insurance as part of your asset protection plan

Often, the simplest way to protect assets is by shifting the risk to an insurance company. This should generally be your first line of defense. However, insurance may not provide all the protection you need, or it might not be available.

Other asset protection strategies generally involve transferring legal ownership of assets to other persons or entities, such as corporations, limited partnerships, and trusts. The logic behind shifting ownership of assets is fairly straightforward: your creditors can't reach assets you don't own.

Options for business owners

You might be a business owner, or thinking about starting a business. If so, choosing a business entity is an important decision. There are several options you can choose, all of which can protect your personal assets from creditors and litigants:

  • C corporations are considered separate legal entities, and business assets are considered separate from your personal assets.
  • With a limited liability company (LLC), income and tax liabilities are passed through to its members but the LLC is considered a separate legal entity and can be used to own business assets, which can protect your personal assets from business claims.
  • Limited liability partnerships (LLPs) and professional corporations (PCs) are generally formed by groups of lawyers, accountants and physicians. If a partner and the firm are sued for negligence, only the partner may be liable, while the personal assets of the other partners may be protected.
  • Many families place assets such as closely held businesses and income-producing real estate in family limited partnerships (FLPs).  While creditors and litigants can file claims against the FLP, they generally don’t have access to the assets held by the FLP.

A number of issues should be considered when selecting a form of business entity, including tax considerations. Consult an attorney and tax professional before shifting assets to a corporation or other business entity.

Protective trusts

Protective trusts, such as irrevocable trusts and domestic self-settled trusts,  are intended to protect your assets and/or estate from creditor claims, lawsuits, an unwanted beneficiary, or other threats. Generally, protective trusts work to pay income to the beneficiary you name in the trust. The trust also can be set up to pay out for a specific purpose, such as education expenses, or care for a beneficiary with special needs. In fact, you can name yourself as the beneficiary to ensure payment of income while protecting the trust assets from creditors and lawsuits.

Your creditors are only able to reach assets in the trust to the extent of your beneficial interest in those assets. If you have no right to the assets of the trust, your creditors can't reach them. On the other hand, if you're entitled only to trust income, that's all your creditors can seek to attach.


Some states offer better asset protection laws than others, so before you establish a business entity or trust it’s important to consult with a business or trust attorney to help you figure out which options make the most sense in your situation.


This article offers general information and should not be viewed as personalized legal advice. Although we strive to make this information is accurate and useful, you should consult with an attorney before implementing any asset-protection-related actions.

Joelle Spear is a financial advisor located at Canby Financial Advisors, 161 Worcester Road, Framingham, MA 01701. She offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. She can be reached at 508.598.1082 or at [email protected].


Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018. Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances.