The best form of asset protection is to know a good
trial lawyer and to have your asset protection plan created or at
least reviewed by one who will stand by and defend the plan. Consider
these real life facts: Mr. Smith stops his truck to make a delivery.
A drunk driver comes along and hits a pedestrian running across
the street near Mr. Smith's truck. The pedestrian is crippled. Result?
Mr. Smith gets sued for $20 Million Dollars because he "obstructed"
the drunk's view. (And because he had a "deep pocket".)
Could this really happen? Absolutely. I know first hand because
I successfully defended my client "Mr. Smith". Homeowners,
business owners and employers are all vulnerable to lawsuits. So
is anyone who owns a dog, hunts, owns a gun, a business or operates
a boat or drives a car. Or you may have read about "Cohasset
Lennon" who was sued when a teenager died after leaving
Lennon's son's high school
graduation party where alcohol was allegedly served? I defended
Lennon successfully in both the civil and criminal actions against
him when the D.A. tried to put him in jail and he was sued in civil
Discrimination claims abound and the trend today
is for insurance companies to "deny coverage" on insurance policies
that you paid for. If you have unprotected assets, then you are
a "target" with a "deep pocket" in a civil damages lawsuit. Each
year over 25 million civil lawsuits are filed. You have a probability
of being sued several times during your life. You can insulate and
protect yourself from losing your valuable assets from a lawsuit!
If you have more than $50,000.00 in combined assets, you need to
take action. These techniques in addition to and sometimes in coordination
with other techniques often used in estate planning can insulate
you from creditors and even taxes.
The combined selective use of newly recognized LLC's
(Limited Liability Company's), Limited Partnerships and Trusts
can limit your exposure to financial catastrophe and give you lawsuit
protection. One of the strategies you can employ to discourage
lawsuits is to separate and diversify assets. Having a plan to separate
your safe assets from more vulnerable ones is the first place to
start. A Family Limited Partnership, for example, allows you tremendous
protection against creditors. You can control the partnership assets
without exposing them to creditors if properly drafted.
if used in tandem, can also achieve a measure of protection as can
shifting control to a spouse if that spouse is less likely to get
sued. Many more techniques such as the use of trusts, living trusts,
charitable trusts and trusts for minors can greatly reduce your
exposure to lawsuits as well as providing tax and estate advantages.
Seperating your assets always helps to protect individual assets.
Regarding asset protection of different business
entities: A Sole proprietor has unlimited liability. In Partnerships:
Partners have unlimited liability. Limited
Liability Company Members are not typically liable for the debts
of the LLC. Subchapter S Corporation
Shareholders are typically not personally liable for the debts of
the Sub S corporation. Regular C corporation
Shareholders are typically not personably liable for the debts of
No matter what size your estate, there are basic
and inexpensive things everyone can do to protect assets from creditors:
You should always Prepare a homestead : Filing a Declaration
of Homestead in Massachusetts gives you protection against creditors
for up to $300,000 in the equity in your home. Single persons are
eligible to file homesteads. Disabled persons can be entitled to
EXTRA protection as are persons over the age of 62.
You can also Own your Home by Tenancy by the Entirety (Massachusetts)
This form of ownership affords in many circumstances excellent
protection against creditors for married couples.
A good asset protection plan
uses some or all of the following tools:
1) seperation of assets (very importatnt)
2) personal homestead
3) House held in Tenancy by the Entirety (if married)
4) a personal umbrella policy (very inexpensive)
5) use of Limited Liability companies, trusts and or family ltd
6) title not held in name of person likely to be sued (optional)
7) have a trial attorney prepare your asset protection plan so they
can stand by and defend the plan they created - it costs no more
in the short run but can save all your assets in the long run.
Notice: We have provided this information as general
background info. We are currently NOT accepting new asset protection
clients. Thank You.