How to protect your assets from a lawsuit or creditors
Asset Protection
If your assets are not adequately protected, they could be at risk of loss due to lawsuits, bankruptcy, or other creditor actions. Understanding the laws that offer asset protection is crucial, as well as knowing the steps you can take to safeguard your savings.
Why You Need Asset Protection
Safeguarding your assets is essential to shield them from creditors. There are numerous situations where creditors may attach or garnish your assets, such as during bankruptcy, divorce, or civil lawsuits.
It's crucial to anticipate these scenarios before they arise. If you fail to adequately protect your assets, you risk losing them.
Homesteads
The homestead exemption is a legal safeguard in numerous states that shields a home from creditors in the event of a spouse's death or during bankruptcy proceedings.
The level of protection for your home can differ significantly from one state to another:
Some states provide unlimited protection
Others offer limited protection
A few states, however, grant no protection at all.
Annuities and Life Insurance
The protection of assets in annuities and life insurance is governed by state law. Some states shield the cash surrender value of life insurance policies and annuity contract proceeds from attachment, garnishment, or legal actions initiated by creditors.
This provides policyholders with a significant layer of financial security, ensuring that their investments remain intact even in the face of financial difficulties. The extent of this protection can vary widely from state to state, with some offering comprehensive safeguards and others imposing certain limitations.
Other Asset Protection Strategies
Here are some additional affordable and straightforward strategies to safeguard your assets:
Transfer assets to your spouse's name: Keep in mind, however, that this transfer could have implications in the event of a divorce.
Increase contributions to your employer-sponsored retirement plan: This plan may offer unlimited protection for your funds.
Purchase an umbrella insurance policy: This type of coverage protects you from personal injury claims that exceed the standard coverage limits of your home and auto insurance.
Separate business assets from personal assets: This practice ensures that if your business faces difficulties, your personal assets remain protected.
If you wish to engage in asset protection for yourself and your family or for your business, please fill out the form below and an asset protection attorney from our office will contact you.
