Advantages Of Asset Protection
Imagine you are a defendant in a lawsuit. What will happen if there is a large judgment against you? While insurance - liability insurance, errors and omissions insurance, and other types of insurance - is an important component of any asset protection plan, what will happen if your insurer refuses to pay because of a policy exclusion?
Insurers lose money when they pay claims and will often take advantage of policy exclusions to transfer risk to you. Even if your insurance policy covers the judgment, what if the judgment is in excess of the insurance policy's limits?All insurance policies have limits of coverage. In these cases, the judgment creditor may be able to access your savings, investments and even your home to satisfy the judgment unless you have an effective asset protection plan in place.
Perhaps you want to ensure that your hard earned assets remain in your family. I routinely work with clients to create plans for asset protection in Stamford, Watertown, and throughout Connecticut. Whether it's protecting assets from creditors, providing for a loved one who has creditor issues, is in an unstable marriage, has special needs or lacks skills to manage their finances, my experience and personal approach can help you achieve peace of mind knowing that you've worked so hard to earn will be secured.
Who Needs Asset Protection?
You and your family work hard to build a strong financial foundation. Why not take some time to protect your future? My clients often consider asset protection planning while they are also preparing an estate plan.
A common perception is that asset protection is necessary only for very high net worth individuals and families. However, even those of more modest means may benefit from asset protection strategies. The ability to protect your assets — savings and investment accounts, real estate, businesses, investments, retirement accounts — can have a positive impact on your financial future.
What Is Asset Protection?
By organizing your assets to maximize their value in the face of creditor attack, an asset protection plan can give you peace of mind and protect you and your family as well. You may not be able to prevent a lawsuit, but an asset protection plan can increase the chances that a judgment against you won't jeopardize everything you've worked hard to accumulate.
With more than 22 years experience as a lawyer and 15 years as a probate judge, my clients appreciate my insight and ability to convey complex concepts in a clear way.
Protection For Businesses
Personal Liability of Business Owners
Many small business owners operate under their own name, or simply "do business as" another name. These arrangements are known as sole proprietorships. Owners of sole proprietorships have unlimited personal liability for claims against the business. In partnerships, partners can have unlimited liability for claims against the business and against other partners.
Shortcomings of LLCs and Corporations
Some business owners create limited liability companies or corporations to protect themselves from personal liability for claims against their businesses.
However, in many cases where businesses (including corporations and limited liability companies) and business owners are sued in court, the entity is "disregarded" and the owners are personally liable for the judgment. This is because the owners made serious mistakes in the day to day operation of the business, jeopardizing the liability protection they thought they had.
The Cost of Bargain Basement Vendors
While it's easy and inexpensive to use an online vendor to create a business entity, these vendors may fall short in advising how a business should be operated to maximize the liability protection of the LLC or corporation.
With my clients, it's far more important to take the time to understand and partner with them to create an effective asset protection plan that they understand and can follow.
I routinely advise my clients on the formation and operation of their businesses to maximize liability protection. That includes examining different entity options, choosing the one that's most appropriate, creating and registering the entity, providing start up documents and, most importantly, advice on day-to-day operations to maximize liability protection.
Avoid These Mistakes
A real estate investor owned several residential properties which he leased to his tenants. Unfortunately, someone was injured on one of his properties when a wrought iron railing on a balcony broke and they fell to the ground several feet below, sustaining serious injuries. A court awarded the injured party a significant monetary judgment against the property owner.
While the owner had liability insurance on the property where the accident occurred, the insurer refused to cover the judgment because the railing that failed was rusty. In the municipality where the accident occurred, rusty railings were a violation of the building code. The insurance contract excluded coverage for situations where there were building code violations. This is a common feature of most property insurance policies.
The owner was left to pay the judgment from his own assets. To make matters worse, all the owner's properties were titled in his name only. The judgment creditor was able to reach all of the owner's properties to satisfy the judgment, and the owner lost all of his properties.
Options To Protect Your Assets
An effective asset protection plan must be customized for each person and family. A "one size fits all" approach may be well-suited to advisors interested in earning a fast fee and moving on to the next client.
I only work with a limited number of clients so they're able to enjoy the full advantage of my experience and I can focus on their case.
Whether it's protection for your business, or protection for your assets, such as real property, investments, bank accounts, motor vehicles or future generations of your family, I will create an effective asset protection plan that works for you. By thoroughly examining your goals, together we will develop an asset protection plan that meets your needs.
When you choose me to be your attorney, I will explain your legal options for asset protection. I help my clients navigate through different elements of asset protection plans to find the right fit for their objectives and budget. Call 860-274-6275 or complete and submit the online contact form on this website to find out more about an asset protection strategy for you.