6 Great Strategies to protect your Assets from Lawsuit
Are you being sued by someone? Or you have to sue someone? Proper knowledge and adept information are important for you. But what assets can be taken in a lawsuit? How to protect your assets from being taken away? Let start
What is a Civil Lawsuit?
In a Civil Lawsuit, a person files a case against another person for some type of wrongdoing. And if he is successful the latter will have to pay the former compensation.
A civil lawsuit can be file over contract disputes, injuries from accidents, or any type of harm or disputes.
What Assets can you lose in a Lawsuit?
What actually can be taken in a lawsuit? Well if it’s for personal injury caused by accidents you can lose Car, home, Savings, and everything else.
So let us look at what can be seized:-
– Deposits accounts
– Stock and bonds
– Other similar assets
What happens if Defendant cannot pay the Judgment?
A debtor can claim that he does not have any cash to satisfy the debt. But this doesn’t protect him from paying the debt. The creditor can claim the debtor’s assets. A creditor will discover what kind of assets can be seized.
How can I protect my assets from a civil lawsuit?
If you don’t protect your assets properly, a simple lawsuit can ruin all your savings and assets. You should be aware of how to protect your assets and the measures you can take.
Strategies for Asset Protection from Lawsuits
Assets Protection Trust
This is probably the strongest protection tool you can use to protect your assets. A Trust is a legal entity that holds assets for the beneficiaries. The trustee has legal obligations to control and allocate trust funds and property for the benefit of the beneficiaries.
Putting your assets into a proper trust can protect your assets from creditor’s claims. But you need to make sure that the trust is irrevocable and you have any control over it.
Corporate or Limited liability company
Do you own a business? Whether you a sole or in a partnership, you are at high risk of losing your personal assets. Confused…?
Well, if you are doing business in a partnership, your personal assets are prone to risk even if your partner is at fault, or if he does a fraud. So you must protect your personal assets, how? Form a Corporation, Limited liability company, or a limited partnership.
Here is a reason for you to invest in a retirement account? Retirement accounts protect your savings and prevent creditors from reaching them. Plans qualified by ERISA (Employee Retirement Income Security Act) provide unlimited protection from creditors.
Homestead Exemptions can protect your house from creditors. It differs from state to state. So check the laws of your state and enjoy protection.
Moreover, check how your house is titled. You can make your spouse an equal partner in the house and therefore if someone sues you, then a creditor cannot seize your house as it will need your spouse’s permission.
Automobile liability insurance and homeowners insurance can help you if you are sued. Automobile liability insurance covers you if you accidentally cause injuries, death, or property damage.
Make sure you have a proper understanding of your automobile insurance provisions and limits. Two important exclusions are Excluded drivers and business use. Read your insurance documents carefully and check out if your policy covers these general exclusions or not.
Homeowner insurance also covers various claims such as,
- Your pet harms someone
- Someone slips on your porch
- Your child breaks someone else windows.
- Your house flooded with water.
- Your garden tree falls and harms the neighbor’s property.
Exclusions are if you operate any business in your home.
Eliminate Your Assets
If nothing else, just transfer your ownership to an offshore assets protection trust or another family member. If you are in a profession that often attracts lawsuits, you can give an advance of your will.
Protecting your assets is very important for you to protect your assets from lawsuits. No one is prone to lawsuits not even you, Therefore try out steps which you can try to protect your assets.