Personal Asset Protection
|
Personal asset protection is a plan to protect one's possessions in the case of a civil lawsuit judgment that goes against him. Liability lawsuits are a common practice against many professions whose activities imply a large risk. Doctors, pilots and other professionals whose activities can put them at risk need to have personal asset protection in the event that a financial lawsuit judgment is more than their insurance coverage. For example, if a physician is sued for five million dollars and his liability coverage is only four million, he could lose his house and all personal possessions. Yet it is not just the doctor or pilot who has the risk of losing his home and possessions. In the event a person is in an auto accident and is sued for being the cause, the final financial judgment could be much more than the liability coverage a person has to protect them. And in this case, a person's house could be taken along with all belongings.
Without a doubt, a higher ceiling of liability protection is the best defense against property seizure. Most people opt for a low amount of personal asset protection or liability coverage on their car insurance policy, simply to lower the premium payment. This is understandable, but for a few dollars more each month, the liability protection could be raised considerably, and that might be the difference between keeping and losing a person's personal property in the case of a tragic circumstance. A person needs to rethink their insurance issues if they have a large personal estate and very low liability coverage. This high low ratio is just a rotten circumstance waiting to happen.
If a higher car insurance premium is not possible within one's budget, there may be some ways to remedy that situation. A thorough examination of all non-essential expenditures may provide some extra cash somewhere. Enjoying one less meal out a month, having basic cable instead of premium packages or other innovative methods of cutting costs may allow a person to afford a much higher liability ceiling on their car insurance. There may even be enough to help raise that same personal asset protection on one's homeowner insurance, which is another target of litigation action. In the haunting specter of losing one's house, how many people wouldn't trade a night of eating at home for the ability to keep and maintain their residence?
One of the actions a person might do to maintain a residence in the result of a liability suit is to file a Declaration of Homestead. This is a simple legal document that can be filed quickly and with just a few dollars and can go a long towards protecting one's residence. This filing is legal in twenty seven states and they are designed to protect, at least to a point, the family home. Certain percentages or amounts of the value of the house, varying from state to state, are protected by the Declaration of Homestead Act that people file. This amount is not a lot of money, sometimes as little as five thousand dollars or so, but it does provide some personal asset protection. If such a horrible thing would ever happen to you, could you forgive the person who might try and take your house or your family's savings? Jesus said, "Love your enemies, do good to them that hate you, bless them that curse you and pray for them that despitefully use you." (Luke 6: 27, 28)
If a person owns a business, there is no doubt that personal asset protection ought to be a high priority. Any accident on one's business property or any action taken by an employee that brings risk to another person could eventually result in the taking of a person's own property as part of the judgment. But this can be mitigated by having in place asset protection plans that are usually put together by an attorney with experience in this field. Many things can happen that are outside the control of the business owner. The ability to have peace of mind that at least a person's own place of residence and personal savings accounts are covered behind a shield of safety is certainly worth the price of attorney fees. Trying to move assets around after an incident occurs can be construed as fraud.
Look into the possibility of getting one's business approved as a Nevada corporation. This state is tax free and does not report any income to the IRS, thereby not allowing creditors an opportunity to look into legal books. This state also protects business owners from personal liability against actions committed by their corporation. All of this is legal and above board, but not all businesses may qualify to have themselves set up under this particular state's protection. Offshore banks accounts are also a way that many business owners try and gain personal asset protection from those who might sue them in the event of litigation.
The offshore account is one "homemade" way to try and achieve personal asset protection. When set up a particular way, all offshore assets are private and not subject to any US laws. This allows the business owner to have peace of mind that at least his savings can be protected, if not his residence. Many elderly people transfer money over to relatives so that upon receiving Medicaid insurance they do not have to turn their savings over to the state of residence. This also is a legal form of asset protection.
|
|
|
|
