Are you prepared to protect your assets in case you get sued?
Hopefully this won’t happen to you, but the hard reality is that successful, financially secure individuals, especially business owners and professionals, are targets — a magnet for actions such as lawsuits and torts. For example, more than a third of physicians (34%) have had a claim filed against them at some point in their careers.1 For business owners, 36-53% of small businesses are involved in at least one litigation in any given year.2 Even if these claims or lawsuits are frivolous, they can be frustrating and potentially devastating to your financial well-being.
The good news is that there are clear, legal ways for you to protect your assets. The overall goal is to protect yourself and your family by isolating your assets from potential attackers – building barriers that are extremely difficult for lawyers, creditors and other plaintiffs to penetrate. With strong barriers in place, potential litigants will hopefully be discouraged from bringing a lawsuit, or encouraged to settle quickly on terms very favorable to you.
So, what steps can you take to protect the assets you’ve worked so hard to build from lawsuits and other unfounded and even unexpected liabilities?
- Put your plans in place in advance.
Protect your wealth before a liability arises or a claim is made. It is much more difficult to put effective protection strategies in place once a claim or liability is present.
- Don’t overlook the basics.
Make sure that you have the basic titling and ownership structures in place regarding the assets that you want to protect. Proper ownership/titling and the use of certain entity types like corporations and LLCs can be very effective to help protect assets. Keeping good records and following the rules and standards for your profession or industry can be very helpful. Also, evaluate your risk exposures and potential liabilities and obtain insurance to protect yourself against them to the best of your ability. For example, for many people, a large umbrella policy is generally an efficient, expedient way to safeguard assets.
- Evaluate advanced asset protection strategies and work with qualified professionals.
Beyond the basics, there are numerous sophisticated strategies that you can take to protect your assets. While offering the benefits of asset protection, some of these strategies can be irrevocable, or at best be very hard to reverse, along with possibly having other potential downsides. Also, if an asset protection strategy is poorly structured or not executed properly, it may not be effective when you need it the most. Therefore, when putting asset protection strategies into place, it is important that you work with professionals that are highly qualified and experienced in this area.
If you would like to learn more about how asset protection strategies might benefit you in your situation, please contact your advisor at Atlanta Financial Associates.
1InsuranceJournal.com March 7 2018 For US Doctors, Being Sued is a Common Ailment
2Forbes.com July 14, 2014 You’re Going to Get Sued-Here’s How Not to Get Screwed, Basha Rubin