PROTECT YOUR ASSETS FROM LAWSUITS
Obviously we live
in a litigious environment. Since personal injury lawyers work on a contingency fee basis, one of the key elements in deciding to pursue a personal injury lawsuit is whether or not the adverse party has insurance coverage. Since bodily injury coverage (pays another person for injuries they suffered due to your fault) is not mandatory for car owners, I always stress to my clients to carry as much uninsured motorist coverage as they can afford (this is coverage which will pay you damages from a car accident if the other person who caused the crash is uninsured). While it may not be common in the personal injury field to sue an uninsured individual, it can happen if it is determined that the other party has assets. Of course there are numerous other causes of action where individuals are sued regardless of their insurance situation. Therefore, listed below are some “asset protection” recommendations:
- Your IRA, 401(K), and other retirement accounts will most likely be protected from creditors. (However, please note that a retirement account may be vulnerable if you owe federal taxes or child support. In addition the Supreme Court has ruled that an inherited IRA is not protected in bankruptcy unless you inherited the account from your spouse.)
- If you live in a state like Florida, which has a homestead exemption, part or all (like Florida) of the value of your home will be protected from a creditor if you lose a lawsuit. (You also may wish to title your home, or any other property for that matter, by using “tenancy by the entirety.” This is available to married couples in some states, and, therefore, whichever property is titled like this, will not be collectable if only one spouse is sued.
- If you are a small business owner, there is a risk your business could threaten your personal assets. You may wish to operate your business as an S corporation or a limited liability company (LLC) because it will be harder for creditors to take your share of the business to satisfy a personal debt.
- If you have significant assets you may wish to establish an asset-protection trust. These trusts are irrevocable meaning you can’t take back the assets. Instead distributions are at the discretion of a trustee, who could stop payouts if there were a legal judgment against you.
- Buy umbrella liability insurance. This offers liability protection in addition to that offered by your auto and homeowners coverage.
These are just a few suggestions. Of course before relying on these, always seek the advice of experts in asset protection, insurance, trust, and business in addition to reviewing the laws of the State you live in or conduct business.
The Law Offices of Steven S. Farbman are always interested in the safety and well-being for the people of our community. As always please feel free to contact my office with any legal questions you may have. For more than 30 years, Steven S. Farbman has been helping members of this community who have been seriously injured due to the carelessness and negligence of others.
Law Offices of
Steven S. Farbman, P.A.
Regions Bank Building
450 North Park Road
Penthouse Suite 800
Hollywood, FL 33021
Specializing in protecting the rights of seriously injured clients since 1985 and getting them the compensation they deserve!
Our doors are always open
to you, your family
For your convenience, we speak Spanish and Russian.