If you were to wind up in court, these strategies could help you keep your assets safe:
Nowadays at any time, a lawsuit can happen to anyone in Alexandria. Close to 15 million civil cases are filed yearly in the U.S. alone.
Lawyers, business owners, doctors, architects, and others who work in a field where lawsuits are quite common, it almost seemed inevitable that you will get sued. The New England Journal published a study which found that 99% of physicians in specialties that were high risk will deal with a minimum of one malpractice lawsuit before they reach the age of retirement.
The great thing is that you can use asset protection tools to protect your possessions and property – your home and business, as well as your financial accounts – from would-be creditors and future litigation. Here are a few steps you can take to make you less of a target for anyone eager to sue and- if you were to be sued – will increase your probabilities of a favorable settlement:
1. Purchase Enough Insurance
When it comes to protecting your assets, the first line of defense is to buy enough proper insurance for you as well as your business. To guarantee that you have enough coverage for you home, vehicles, and other belongings, it is best to work with a professional in Alexandria. If you are a business owner, make sure that have your commercial general liability coverage is checked and updated on a regular basis, it may also be a good idea to purchase an employment practices insurance as well as a professional liability insurance. Although it may sound tedious, reading all of the fine print on these policies is also something you should do.
2. Reconsider Marital Property
To collect the debtor’s share, creditors are also able to force couples to liquidate any assets which are conjugal, so there are states in which it makes sense to protect your assets simply by signing them over to your spouse. That being said, this approach does have significant limitations and drawbacks. If you ended up being divorced, this divided property could turn into a subject for disputes. On top of that, the assets have to become the property of the spouse. If the debtor still controls the assets, creditors can go after assets which are held in the name of the spouse, for example writing the checks from the bank account. This approach is also one which in states with community property law, where married couples jointly own almost everything which is purchased during the marriage, regardless of who holds the title, well it would not work. To find the ideal approach for your situation, it is best to work with a professional.
3. Set up One Or More Business Entities
When everything you own is under your name, or under the name of a single company, one lawsuit could result in devastating losses. It is best that your most valuable asset, equipment, real estate, receivables, etc. be held in separate entities. This may require more than one LLC (limited liability company), various trusts, or other business entities. A professional can help you setup the best entities as well as advise you on the ideal practices when it comes to their use.
4. Consider a DAPT
Many numbers of states are allowing individuals to establish trusts that are very protective and insulate assets from the claims of creditors. Holding your assets in a domestic assets protection trust may provide you, in some states with an additional layer of protection from creditors. On top of that, if you add a spendthrift clause to your DAPT you can, and remember that this is only in some states; protect these assets which are passed down to an heir from their creditors. The quality and level of protection will, of course, vary from one state to the nest, this is why it is critical to work with an attorney who is knowledgeable to select the ideal jurisdiction and properly establish the trust.
5. Send Some Assets Offshore
An FAPT (foreign asset protection trust) is a trust which is held in a different country, this places form of your assets in a place which the U.S. courts cannot reach. Lawsuits that target assets which are being held in offshore trusts are litigated in foreign jurisdictions; this means that they are subject to international justice systems and laws. This aspect in itself is many times enough to dissuade anyone from filing a suit. FAPTs are quite pricey to establish as well as maintain they are also subject to accounting requirements and heightened scrutiny. However, there are a lot of clients these trusts make sense for.
Not every one of the protection strategies as mentioned above is appropriate or even necessary for everyone, however even one or two of them can dramatically decrease your risk of losses in the event of a lawsuit. To determine which strategy is best for your personal situation, it is best to talk to an estate planning professional.
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Misha Gill is an Alexandria estate planning attorney for his firm, Speedwell Law, PLLC. If you would like assistance in setting up your own will, living trust, and other estate planning documents, Misha can be reached at (703) 553-2577 or firstname.lastname@example.org.
This post, including any of its contents or links, is not intended to provide you with legal advice. It provides personal perspectives on legal news and developments. Reading this post, leaving a comment, or communicating with its author by email or over the Internet does not create any attorney-client relationship.