Asset protection - what do you do?

[jon-nyc]

I'm curious, besides basics like an umbrella policy, has anyone here taken specific steps to protect their assets from creditors?

I'm specifically thinking about protection from future lawsuits - I have no particular reason to be concerned, it strikes me as a very small risk but one with a potentially large downside.

 

[REWahoo]

I gave away our pit bulls, sold the trampoline and filled in the pool. That, plus an umbrella policy, and I'm good.

 

[ziggy29]

One of the first things people need to do is look up the laws in their own state. If you live in a state like Florida, Texas or Oklahoma, for example, your primary residence, retirement accounts and insurance contracts are a *lot* better protected from creditors and lawsuits than they are in many other states.

 

[braumeister]

I believe in giving everyone ample warning.

 

[heeyy_joe]

In short, no.

 

[Katsmeow]

As ziggy pointed out, you need to look at what your state protects. Where I live there is a lot of protection just by living here.

I do agree about umbrella protection. Another thing is to check and make sure you have adequate scope of liability coverage (underlying policies not just the umbrella) for your risks.

Another point that REWahoo makes but is really good is to try to avoid the situations most likely to create liability. Obviously what those are can vary from person to person. For example, someone who owned rental property might choose to own that property in a form of entity where he or she didn't have personal liability. It is important to consult with an attorney in your state as what that might be or as to asset protection in general.

 

[Khufu]

I'm curious, besides basics like an umbrella policy, has anyone here taken specific steps to protect their assets from creditors?

I'm specifically thinking about protection from future lawsuits - I have no particular reason to be concerned, it strikes me as a very small risk but one with a potentially large downside.

I had an umbrella policy for many years when I lived in NYC. (From Chubb, by the way, recommended.) But when I sold my apartment and quit driving I discontinued it, since those represented my biggest risk of a lawsuit.

 

[brewer12345]

I think an umbrella should do it. You can get multi-million limits on umbrellas if you like.

 

[SumDay]

I have no creditors, so I'm not worried about protecting assets from them. But lawsuits? That's a different story...

So you should have umbrella coverage that equals your net worth?

Uh oh, guess I'd better call my agent Monday....

What's to keep someone from coming after you for face value of your umbrella policy + your assets?

 

[ERhoosier]

I gave away our pit bulls, sold the trampoline and filled in the pool. That, plus an umbrella policy, and I'm good.

When I finally ER, this will be my umbrella policy-

 

[BLS53]

Most retirees are "judgment proof'" as far as income goes. It all comes down to how many "toys" you have beyond a car and primary residence.

There are professional debtors, among those of retirement age, who have asset protection down to a science. Mainly because of the way the law exempts retirement accounts, pensions, and SS. If one has several homes, expensive vehicles, and otherwise, it obviously becomes more difficult to avoid judgments.

 

[photoguy]

What's to keep someone from coming after you for face value of your umbrella policy + your assets?

Well they would have to have some sort of justification and I imagine their losses would have to be proportional to whatever damages they are seeking. Most umbrella policies are in the millions so the insurance companies have incentive to defend you.

 

[FIREd]

What's to keep someone from coming after you for face value of your umbrella policy + your assets?

And how would that someone know the face value of your umbrella policy - or even if your have one. Your insurance company won't disclose it, so just make sure you do not disclose it yourself.

 

[REWahoo]

And how would that someone know the face value of your umbrella policy - or even if your have one. Your insurance company won't disclose it, so just make sure you do not disclose it yourself.

+1

 

[jon-nyc]

What's to keep someone from coming after you for face value of your umbrella policy + your assets?

Nothing. Hence my interest in investigating the topic.

 

[jon-nyc]

Also, to clarify the question, it was what do *you* do for asset protection?

 

[REWahoo]

Also, to clarify the question, it was what do *you* do for asset protection?

Asked and answered.

 

[FIREd]

Is it wise for people to disclose the details of their asset protection plan to strangers on the internet?

 

[pb4uski]

I'm curious, besides basics like an umbrella policy, has anyone here taken specific steps to protect their assets from creditors?

I'm specifically thinking about protection from future lawsuits - I have no particular reason to be concerned, it strikes me as a very small risk but one with a potentially large downside.

No. I have very good underlying coverage and a umbrella from the same insurer and between the two the insurer has an incentive to mount a vigorous defense if I should ever be sued.

That and I try my best not to do anything stupid or short sighted that could spawn a suit. That's it. Never been sued, don't expect to be but am nonetheless prepared.

 

[obgyn65]

Nothing. I just avoid litigation at all costs professionally and personally. Professionally by doing the best I can for all my patients. Even for those patients i see at free clinics while being covered by the Good Samaritan Act. And personally by keeping in good terms with everyone, keeping a low profile, staying out of trouble in general, and by remaining single.

Also, to clarify the question, it was what do *you* do for asset protection?

 

[kaneohe]

Consider leaving your 401K at your employer when you leave if you don't need immediate access to it. The ERISA protection if you value it should be balanced against the various reasons usually given to roll it over into an IRA.
Sometimes in the 401K you have access to institutional class funds that have lower ERs and if you are lucky, the employer may take care of much of the other expenses.

 

[truenorth418]

... and by remaining single.

That, and an umbrella policy, are my primary means of protection for now.

 

[sanfanciscotreat]

If you drive a car, the biggest potential liability is a large lawsuit against you in the event of serious injury and you are at fault. An add on to the auto insurance policy will give higher coverage limits at a reasonable cost.

 

[pb4uski]

....and by remaining single.

That, and an umbrella policy, are my primary means of protection for now.

And mine is an umbrella policy and remaining married.

 

[REWahoo]

If you drive a car, the biggest potential liability is a large lawsuit against you in the event of serious injury and you are at fault. An add on to the auto insurance policy will give higher coverage limits at a reasonable cost.

Umbrella policies require you to have certain levels of coverage on your auto policy. My USAA umbrella policy requires me to carry $300K/$500k bodily injury and $100k property damage limits.