What is the purpose of "asset protection"?

The purpose of "asset protection" specifically refers to strategies that are implemented to safeguard an individual's wealth from creditors and legal judgments. This can involve a variety of techniques, such as creating trusts, forming limited liability entities, or taking advantage of certain legal exemptions. The primary aim is to minimize the risk of losing assets in the event of lawsuits or financial liabilities. By employing asset protection strategies, individuals can better secure their wealth against potential claims and ensure that their assets are preserved in times of financial distress.

This concept is critical for individuals with significant assets who want to safeguard their wealth against unforeseen circumstances, such as unexpected legal issues or creditor claims. The other choices, while related to financial management, do not specifically address the protection of assets against external threats.