Tags: asset protection | lawsuit | liability shield

Protecting Your Assets Against Lawsuits, Predators

Protecting Your Assets Against Lawsuits, Predators


Tuesday, 21 February 2017 04:39 PM Current | Bio | Archive

While most people are busy trying to increase their wealth, people often overlook protecting the wealth they already own.

If your assets aren’t protected, a lawsuit at the wrong time could jeopardize everything you own. Lawsuits are cheap, have a low time investment for the plaintiff and often end with an innocent defendant settling out of court simply to avoid the costs, time and effort needed to win the case. If you own significant assets, you are exposed specifically because people have a lot to gain from you. Secondly, if you have events at your personal home, own rental property, or drive a high-performance car, you are at an even higher risk as these activities are more likely to lead to personal lawsuits.

Once someone has filed a lawsuit, it’s likely too late to guard your assets. That’s why it’s important to protect them before you get sued. Below are 6 steps you can take to guard your assets against creditors and predators:

1. Transfer exposed assets into exempt assets. Why have your assets exposed if you can convert them into lawsuit-exempt assets? In Florida, private items like furniture and personal effects are exempt, but more valuable possessions like your primary residence and life insurance are also exempt. Properly structured life insurance is a valuable asset that can be used for a variety of financial needs. In most states it is resistant to and exempt from creditors and predators alike. Annuity and retirement accounts also receive protection from many states as well.

2. Shield everything against creditors. So many of our assets are reliant on each other, and it is important to make sure all your assets are protected. If your house is protected but your business or money isn’t, how are you going to pay property tax or upkeep costs? Shielding every asset against a lawsuit is the only way to protect them.

3. Put all non-personal assets into a protective entity. This is a time old technique, and it’s still around for a reason. Transfer assets currently in your personal name into protective entities such as LLCs, trusts, etc. Nothing else provides that same level of protection for your beneficiaries. You’re in full control over all your assets but have no personal liability over them.

4. Use liens to spread the risk. Lines of credit can be used to minimize the actual value of an asset that you own. This reduction in value of your asset means that you can only be at risk in losing the net value of the asset after the lien. This reduces your likelihood of being a target for lawsuits.

5. Refrain from titling your assets solely in the name of others. They too may also be exposed to financial liability and turning over your assets simply makes someone else the target for a lawsuit.

6. Review your protection plan annually. There is no point creating a strong personal liability shield if you don’t keep it up to date. Meet with your advisors annually to ensure your plan adequately covers you and is compatible with new legislation that may have been enacted.

Richard S. Bernstein, CEO of Richard S. Bernstein & Associates, Inc., West Palm Beach, is an insurance advisor for high net worth business leaders, families, businesses, municipalities, and charitable organizations. An insurance advisor to many of America’s wealthiest families, he is a writer, trusted local and national media resource and expert speaker on estate planning and health insurance. Visit his website at www.rbernstein.com. To read more of his reports — Click Here Now.

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While most people are busy trying to increase their wealth, people often overlook protecting the wealth they already own.
asset protection, lawsuit, liability shield
Tuesday, 21 February 2017 04:39 PM
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