Protecting yourself from lawsuits: 14 things to do.
The only way to protect your assets from the lawsuit epidemic is to take yourself off the target list. While almost 200,000 lawyers are trying to find ways to take your money, there are only a few hundred who want to help you protect your assets. If you have a lot of money, there is no one single way to avoid the determined creditor, but you can take precautionary steps to protect most, if not all, of your assets.
Here is a list of fourteen things you can do to protect your assets. You have worked your whole life to earn these things, now it is time to take the steps to prevent losing them in a lawsuit.
#1 – Be cautious of joint ownership. Unless you have a good reason of have been advised by legal counsel, try to avoid placing anything in joint ownership. All assets that are in joint ownership are a double risk because the creditors of both owners can go after the asset.
#2 – Never put another name on your bank account. If you have a co-signer on your bank account, your money will be exposed to that person’s creditors. Try to avoid having family members as co-owners of any bank account. Creditors can take money from any account where you are allowed to withdraw funds on your signature. If there is a need to have someone else sign a check for you, or vice versa, consult an attorney or contact Estate Street Partners. There are ways this can be done without putting your assets in jeopardy by having a co-signer on the account.
#3 – Do not ever rely on a domestic, revocable living trust. This may help you avoid probate taxes in the future, but it will not act as a way to remove any assets from future creditors.
#4 – If you operate a business make use of a corporation or LLC. If you have to act as the proprietor to the business for tax reasons, elect to be taxed as a corporation or establish a LLC that will own the business. Remember to observe all legal formats and refrain from using the corporate account as a personal account.
#5 – Make sure you have a detailed review of the title to all your assets. Many people find themselves in a situation where they have set up a limited partnership or corporation and then have failed to change the title of the property. Assets that are held jointly will pass outside of your trust or your will. Any assets that have a beneficiary named will not be subject to the general provisions of your trust or your will.
#6 – You need to have an estate plan if you have more than $1,500,000. The U.S. estate tax exempts amounts up to $1,500,000 of any estate from the applicable estate tax. If you have assets in excess of that amount, it may be subject to taxes if you don’t have an estate plan. Co-ordinate your estate plans with your asset protection plan. This will ensure your entire estate will be protected.
#7 – Compile potential risk lists. When this is done, then decide what you can self-insure. If there are some risks you can get rid of, do so. Get rid any risks before seeking insurance.
#8 – Unless there is ample insurance coverage, do not serve on any board of directors. If the board is involved with a closely held corporation, reconsider your decision.
#9 – Do not put central focus on asset and lawsuit protection plans. Each of these plans should be integrated with all other financial plans. Your personal insurance policies, income tax strategies and estate plans should all be incorporated.
#10 – Take caution when acquiring the title to land. If the land is contaminated by hazardous waste, you will be liable. Always have the land examined by a qualified environmental waste expert. You don’t have to own the land to be liable. You will be held responsible if you are a trustee, executor or partner.
#11 – Having one sole advisor is not a good idea. Try to get referrals from competent advisors. Having more than one will allow the advisors to work together as a team. This will help devise better protection plans. Before hiring an advisor, make sure to get a second opinion, especially if the advisor works on commission.
#12 – Always pay attention to all legal protocols and follow them.
#13 – Rid yourself of your assets before any claims are made. This will help to avoid losing the assets in a lawsuit.
#14 – Create a plan that will make creditors walk away from your assets, by retaining only a small amount of assets, but nothing that you would want to risk losing if there is a lawsuit.
To learn more about how estate planning & trust planning are affected by asset protection strategies visit Asset Protection Trust, Getting Sued Hiding Assets, Offshore Asset Protection, Living Revocable Trust.