DEFINITION of 'Safe Asset'

Assets which, in and of themselves, do not carry a high likelihood of lawsuit risk. Mere ownership of this type of asset does not expose the asset owner to a significant risk of litigation.

Assets such as stocks, mutual funds, bonds, bank accounts and your personal residence are examples of safe assets.

BREAKING DOWN 'Safe Asset'

The distinction between safe assets and dangerous assets is particularly important in asset-protection planning. Mixing the two could cause contamination of the safe assets by being housed in an investment vehicle with dangerous assets. Safe assets, due to the relatively low degree of litigation risk involved with their ownership, can be owned together with other safe assets. However, safe assets are also more vulnerable to creditor seizure to satisfy a debt or judgment.

RELATED TERMS
  1. Dangerous Asset

    An asset which, by its nature, creates a substantial risk of ...
  2. Permanent Current Asset

    The minimum amount of current assets a company needs to continue ...
  3. Business Asset

    A piece of property or equipment purchased exclusively or primarily ...
  4. Real Asset

    Physical or tangible assets that have value, due to their substance ...
  5. Asset Condition Assessment

    A report outlining how an organization can manage capital assets ...
  6. Long-Term Assets

    1. The value of a company's property, equipment and other capital ...
Related Articles
  1. Investing

    Assessing Bank Assets: Are Your Savings Safe?

    Learn how to determine if your assets are safe or if your bank has spread itself too thin.
  2. Managing Wealth

    What's an Asset?

    An asset is a resource with economic value.
  3. Trading

    Asset Protection For The Business Owner

    Could incorporating your business help protect it? Find out here.
  4. Managing Wealth

    Explaining Financial Assets

    A financial asset is intangible property that represents a claim on ownership of an entity or contractual rights to future payments.
  5. Investing

    What is a Real Asset?

    A real asset is a physical asset that has value.
  6. Managing Wealth

    Choosing An In-Home Safe: Features To Look For

    What to look for in a box to protect your irreplaceable belongings.
  7. Managing Wealth

    6 Asset Allocation Strategies That Work

    Your portfolio's asset mix is a key factor in whether it's profitable. Find out how to get this delicate balance right.
  8. Investing

    6 Asset Allocation Strategies That Work

    An asset mix should reflect an investor’s current goals. Here are a few strategies for establishing the right allocation.
  9. Financial Advisor

    An Introduction to Asset Allocation

    A portfolio is only as strong as its asset allocation. To create the right one, investors need to determine their risk tolerance, time horizon and goals.
  10. Financial Advisor

    Build A Wall Around Your Assets

    Learn how to protect your money from lawsuits, creditors and other judgment proceedings.
RELATED FAQS
  1. Are stocks real assets?

    Learn why stocks are classified as financial assets, not real assets. Understand the properties that determine whether an ... Read Answer >>
  2. Are current assets liquid or capital?

    Take a deeper look at liquid current assets for businesses and individuals, and learn how they differ from other types of ... Read Answer >>
  3. What is the difference between current assets and fixed assets?

    Learn what current assets and fixed assets are, examples of current and non-current assets, and the differences between these ... Read Answer >>
  4. What is the difference between fixed assets and current assets?

    Learn the differences between fixed assets such as land and current assets such as cash, as well as how these types of assets ... Read Answer >>
  5. What is the difference between a fixed asset and a current asset?

    Discover the difference between fixed assets and current assets and the value of each to a company. Learn the category and ... Read Answer >>
  6. What is the impact of inflation on liquid assets?

    Find out why inflation is particularly problematic for liquid assets, and learn what holders of liquid assets can do when ... Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center