Asset Protection began in the Middle Ages to keep the Government from foreclosing the land away from the peasants, at that time a Trust was a common tool; effectively the peasant-farmer/land-owner pledged his property to the Church and the Church agreed to allow him to remain on the land for a set length of time, usually longer than the farmer lived. The concept of the trust was well documented in the "Common Law" and even today much of the traditional "Asset Protection" schemes are based upon this "Trust" concept (as shown by most of the references in this wiki) even though most of the world no longer regulates itself directly in the "Common Law".

Asset protection began to develop as a stand-alone area of the law in the late 1970s. It began coming into prominence in the late 1980s, with the advent and the marketing of offshore asset protection trusts. Colorado attorney Barry Engel is credited with the introduction of that concept and the development of asset protection trust law statutes in the Cook Islands.

Over the years, this new field of law enjoyed a marginal reputation, but started going mainstream in the mid-1990s. A 2003 article in the Wall Street Journal claimed that 60% of America's millionaires have considered engaging in asset protection planning.

Asset protection is based on the basic principle that any asset owned by a person (with some minor exceptions, like an ERISA-qualified retirement plan) can be reached by that person's creditor. Asset protection sets as its goal the concept of removing assets from a debtor's legal ownership, while retaining control and beneficial ownership. Over the years, numerous legal structures have been developed to split up legal title to assets from control and beneficial enjoyment.

There are literally dozens of various asset protection structures in use today. The specific structure best suited for each person will depend on: (1) the nature of the asset being protected (i.e., different structures are used to protect rental real estate, a personal residence, a bank account, a retirement plan, etc.); (2) the timing of the claim or lawsuit; (3) the debtor's risk adversity; and (4) the aggressiveness and the intelligence of the creditor.

For example, when seeking to protect a personal residence, there are approximately 7 different options (according to some asset protection articles written by an asset protection attorney-expert^. These may include: transferring ownership to a living trust with a generic name, transferring ownership to an irrevocable trust, encumber the residence by borrowing against it, recording a naked deed of trust, selling the residence on an installment basis to a family member, selling for cash to a third-party. According to Jacob Stein simply changing legal title to a living trust with a generic name may work to defeat the claims of some creditors, but not most. For someone who wants real protection, a better option may be an irrevocable trust or an outright sale of the residence.

It is preferable to engage in asset protection planning before there is any need for it. Engaging in after-the-fact asset protection planning may be deemed to be a fraudulent transfer allowing the creditor to set aside the planning.