Attorney Jeffrey P. Coleman briefly explains asset protection and gives an example of its application to the management of business.
As you develop in your life, and you have more assets, you also have to be concerned about the liabilities. People who operate their own businesses, for instance, have perfect opportunities for exercising asset protection. One of those things that is allowed under the law is that you could establish your business as a corporation. When you do so you are potentially putting the asset that that corporation is in a box with the liabilities. One of the goals of asset protection in that corporate setting is to make sure that the liabilities arising from that business do not invade your personal assets.