Asset protection refers to a set of techniques used to protect assets from creditors. For example, someone without any form of asset protection may be sued and lose. All of their assets would be fair game for the winner of the lawsuit. However, someone with asset protection would be in a different position. If they were to lose a lawsuit some of their assets that were protected would not be could not be seized by the winner of the lawsuit.
A good example of asset protection is O.J. Simpson's pension plan. Even though he owes millions of dollars to the family of his alleged victims, that money is protected by law and they cannot garnish it.
There are many federal and state laws related to what types of assets can be protected from creditors. For example, a properly constructed trust cannot be seized due to debts incurred by the trust beneficiaries. This means if you put money into a trust for your kids, even if your kids lose a large lawsuit the assets that are in the trust cannot be used to pay the judgment.