Asset Protection FAQ

Who Needs Asset Protection?
When Do I Need To Consider Protecting My Assets ?
Where Do the Assets Go That I Need to Protect ?
Why Do I Need To Protect My Assets
Can I Protect My Assets Even If I already Know That I Owe or Will Owe Money ?

Who Needs Asset Protection?

In general, Asset Protection should be a critical component for any person that wants to be protected from from future lawsuits, anyone owning a business or a home. Professionals, such as doctors, lawyers, accountants, architects or any other person exposed to professional liability should consider how their lives would be affected if they lost everything tomorrow. Loss can occur from negligence, a small lapse of judgment, small oversights, and even acts from your employees, agents or those who you did not consider to be your employees. Other common reasons for desiring Asset Protection include those who anticipate selling or who have recently sold their business, those who are considering marriage or remarriage, or anyone anticipating receiving an inheritance.

Below is a list of the most common people who need asset protection:

• The very wealthy (what lawyers tend to call “deep pockets”)—when an injury (either physical, emotional or pecuniary) occurs, people seek lawyers and lawyers seek to blame responsibility on those are most capable of paying. The amount of money or assets an individual has directly correlates to the amount of effort and the likelihood of said person being named as the legal cause of the injury to the plaintiff. The argument exists that as long as there is a reasonable link, an attorney has a legitimate reason to blame a deep pocket. Even though you may not be the actual cause of an injury, it is likely that you may be faced with the decision of whether to settle for a large sum of money or to spend an equal or greater amount of money simply defending a seemingly frivolous lawsuit. It is best to have adequate protection before being named in the lawsuit. Sufficient Asset Protection strategies may operate to prevent you from even being named in such lawsuits.

• People with impending problems—those looking into a crystal ball and fearing impending danger are urged to protect their assets. Examples of situations in which possible liability may accrue and which is partly under your control include divorce, bankruptcy, illness, etc. Anytime you know that someone may soon try to take assets from you, regardless of the reason, you should begin a plan to protect those assets.

• Professional Occupations—those who are employed in a profession that has a very high liability risk are people who need asset protection. These positions include many types of jobs in the medical and pharmaceutical industry, as well as many other types of professional positions. Even though you may have insurance for protection, your personal assets are not fully protected by your coverage. Moreover, insurance carriers will heavily scrutinize notice requirements under your policy as well as the type of injuries covered under the policy. Some professionals may even choose to be self insured, which may be a good idea as long as they have the right protection strategies in place. A well advised professional will have sufficient insurance coverage as well as strong asset protection vehicles in place.

Even if you aren’t in any of the above groups, you should likely consider some degree of asset protection. Business Owners, are very susceptible to lawsuits. Even those individuals who think they have adequate protection because they are incorporated or operate under an LLC, may in fact be good candidates to have the shield of their company’s inherent protection pierced for several reasons. The asset protection necessary for your situation may be as simple as designing and implementing the correct business model to operate under, or remedying your current structure.

Business owners are likely to be sued for injuries on their property, which could cause you to lose many of your assets. Even those who think insurance will cover the injuries are urged to realize that insurance companies, the same companies you have been paying for years, will employ teams to find loopholes to avoid paying all (or any) of the amount that is owed. If your assets are protected, you will not need to rely so heavily on insurance and in some circumstances, may only need to carry the minimum amounts required for your purpose.

To assess exactly how much asset protection you may or may not need, you can consult with a qualified attorney to determine your risk. This will help you decide what assets you should protect and what techniques will work best for you.

What Is Asset Protection ?

When Do I Need To Consider Protecting My Assets ?

Where Do the Assets Go That I Need to Protect ?

Why Do I Need To Protect My Assets

Can I Protect My Assets Even If I already Know That I Owe or Will Owe Money ?