At the most basic level, asset protection consists of taking affirmative steps to shield your wealth in the case of an unexpected event of duress. Almost everyone engages in some form of asset protection. A common example of this is car insurance. You buy car insurance so that, in case you cause an accident, the insurance company pays the bill for you, rather than having to dip into your personal assets. The more insurance you buy, the better your assets are protected.
Asset protection ultimately involves a series of strategies that erect a legal wall between you and your assets, preventing access to them if you are held liable by the court. The more wealth you have to protect, the stronger and more sophisticated your asset protection plan needs to be. With the right asset protection plan in place, those who would try to take your wealth will find it difficult, if not impossible, to penetrate the wall you’ve built.
Where does liability come from?
As our legal system has evolved, lawsuits against businesses and individuals have become much more common. Thousands of lawsuits are started every day all across the country. Contingency fees mean big payouts for plaintiffs’ attorneys, which encourages them to aggressively pursue each case. There are many areas of the law where you can be held liable:
- Divorce: It takes just a quick glance at the news to see that divorce settlements can wreak havoc on one’s fortune, reaching into the millions or even billions of dollars.
- Real estate: Your personal or investment property can make you liable for injuries to guests or tenants (or guests of your tenants). Apartment complexes are breeding grounds for lawsuits by unhappy tenants.
- Personal injury: Driving is one of the most of dangerous things we do. A car accident can easily put your assets at risk, even if someone else is driving (like your child).
- Business investments: Even owning a small interest in a business that you have no power over can put your personal assets at risk if there is a dispute.
- Employees: If you own a business, a disgruntled employee (or several of them) may decide to sue you for an employment dispute. You can also be held liable for personal injuries and other damages caused by the actions of your employees while on the job.
As you can see, there is potential liability everywhere, in all aspects of our lives. And the higher your level of wealth (and the less it’s protected), the more likely someone is going to find it in their financial interest to pursue a lawsuit against you.
This material has been prepared by Sollertis for informational purposes only and nothing herein is intended as legal advice for any particular or individual situation. You should not rely upon any information herein as a source of legal advice, and receipt of any such information does not create an attorney-client relationship between you and Sollertis. Viewers and readers should not act upon this information without seeking professional legal counsel. Prior results do not guarantee a similar outcome.
