By Attorney Peter A. Keon
In today’s tough economy, we are seeing an increase in the number of civil lawsuits filed, where one party is suing another for some monetary payout. Keep in mind, a majority of lawsuits never get filed because, more often than not, they are settled privately between opposing parties. As we state in our seminars, you can be 100% in the right and the other party 100% in the wrong and they may still be able to sue you and grab your money!
Sadly, I have had several clients recently reach out to me because they had concerns about asset protection. They were being sued following a minor fender bender, or by tenants living in their rental properties, or by employees with a labor dispute. It is important to note that our unique Personal Asset TrustSM feature in our Living Trust is intended for the beneficiaries and it only adds a layer of protection to better protect the beneficiaries’ inheritance from third-party attack. It does not provide any type of asset protection for our clients who are setting up their Living Trust-centered estate plan.
Many people think, “This won’t happen to us” - - and then it does and it may be too late to do much to protect your assets at that point. The key to asset protection planning is that you need to get this planning done before something happens.
A common misconception about Living Trusts is that they provide asset protection for the Trustmaker. This is false. Living Trusts are revocable and amendable, which is an immediate dealbreaker when it comes to asset protection planning. To help our clients who have asset protection concerns, we will often bring in experts who specialize in this area to help them set up the appropriate asset protection planning needed, properly coordinated with your estate plan. This advanced asset protection planning is ideal for those who may have high-risk careers, such as physicians, or those who might have rental property and who may be at risk of being sued by a tenant.
In any event, if you are insured to help you protect against potential lawsuits and claims, you may wish to have an insurance specialist review those policies and consider increasing your coverage or, in some cases adding what’s called an “umbrella” policy. You may also want to look at the fine print and better understand and clarify the terms and limits of your policy. Will your insurance carrier allow you to obtain your own independent counsel if they refuse to settle within your coverage limits?
If you are a business owner, own rental real estate property, or have a sizeable estate where you want to add further asset protection, please contact our office at 1-800-756-5596 so that we can review your estate plan and discuss further asset protection options available.