Category Archives: Dictionary of Terms

A method to value a business that adds the value of all the company’s assets and subtracts the liabilities, leaving the net Value of its assets. Different approaches to Asset-Based Valuations include Book Value, Replacement Cost, Appraised Value, Liquidation Value and Market Value. Asset-based valuation methods ignore the importance of a company’s earnings and cash flow. For this reason, this valuation approach is not typically used to determine the market value of a company that is being sold.

A limited number of states in the United States provided for an Asset Protection Trust, that allows you to avoid or reduce taxes paid upon transfer of any of the trust assets.

The principle goal of an asset protection trust is to insulate assets from claims of creditors. These trusts are irrevocable in nature. Most asset protection trusts contain a spendthrift clause, which prevents the trust beneficiary from alienating their interest in favor of a creditor.