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Old 05-19-2014, 06:55 PM   #41
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Not sure this is the best article but provides an overall perspective but I thought it was good. Umbrella Insurance Policies: Why You Might Want That Extra Protection - DailyFinance

So while you have included boxing trivia in this discussion, here is some more that most people find surprising "from 1910 to 1940, there were twenty-six Jewish world champions, and during the 1920s and 1930s, almost one-third of all boxers were Jewish.
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Old 05-20-2014, 03:01 AM   #42
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Originally Posted by daylatedollarshort View Post
We left money in our old employer 401Ks. We rolled most of our IRAs into the 401Ks while we were still working. They are asset protected by the ERISA anti-alienation clause -

http://www.nytimes.com/2009/04/02/bu.../02CREDIT.html

We keep a mortgage and HELOC on the house since California doesn't have much in the way of asset protection for personal residences.

We have a homestead exemption for the house (not much in California), LLCs for the businesses, business insurance and umbrella insurance.

We took the pensions as annuities in part so if we ever got sued or developed dementia and lost our money due to some scam, we'd still have pension and SS money coming in.

If we both die, the money for the kids goes into a trust and gets doled out to them in dribs and drabs over time.

We took a class on how to be white water raft guides once so we could be guides and invite our friends as the paddle crew, but dropped that idea as soon as they got to the liability part. Apparently that would have been worse than having a trampoline alongside a snake pit next to an ungated swimming pool in the back yard.
In reference to the comments (in bold above):
  • Wish we had left money in the 401ks instead of moving to IRAs for this reason.
  • Also took pensions, though not sure they couldn't garnish future payments.
  • Now that's one thing we didn't think of, sheesh. We are fairly active in white water rafting and are occasionally asked to take friends' guests or relatives for a run. Apparently this isn't something the insurance company considered, either, as we recently got our first umbrella policy and river sports weren't included as a question on the application form.
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Old 05-20-2014, 08:46 AM   #43
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Just to give you an idea, my parents are people who live small and don't take a lot of risks. My mom was scammed by someone who intentionally stopped short so she would get rear-ended (sub 5 MPH impact). The plaintiff waited 2 years (max allowed before fling a case) to sue, then filed for back pain. The responding officer was probably in cahoots with the plaintiff. The insurance company lawyer told my parents that the plaintiff has a long track record of doing this stuff and they knew all about it. However, since she had the judge, doctor and cop in her pocket the insurer ended up settling a bogus claim for 800k. Thank God for that umbrella...
This sounds like something you'd read about in a Grisham novel. Scary stuff.
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Old 05-20-2014, 10:40 AM   #44
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How did you learn of John Sullivan and Jack Johnson? I had to look them up.

Anyhow, talk of "whoopin" and the recent mention of the movie Fargo on this forum reminded me of the following scene at 2:30 in the clip.

There was a movie from the late 1960's, starring James Earl Jones called The Great White Hope. Also, Miles Davis had a recording, I think called Yesternow, inspired by the fight/Johnson. The song ends with James Earl Jones speaking as Johnson saying "I'm Jack Johnson. Heavyweight Champion of the World. I'm black. They never let me forget it. I'm black,alright, I never let THEM forget it."
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Old 05-20-2014, 10:49 AM   #45
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That's right. In the Burns film, Samuel L. Jackson does the voice of Jack Johnson. Perfect casting! And the music is by Marsalis - how great can it get?
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Old 05-20-2014, 11:19 AM   #46
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In reference to the comments (in bold above):
  • Wish we had left money in the 401ks instead of moving to IRAs for this reason.
  • Also took pensions, though not sure they couldn't garnish future payments.
  • Now that's one thing we didn't think of, sheesh. We are fairly active in white water rafting and are occasionally asked to take friends' guests or relatives for a run. Apparently this isn't something the insurance company considered, either, as we recently got our first umbrella policy and river sports weren't included as a question on the application form.
I think on the pension front garnishment of future payments depends on state law. By moving to Florida, a state with strong asset protection laws, O.J. Simpson is famous for getting to keep his monthly pension benefits after losing the post murder trial civil suits.

On the rafting front, the person teaching the class wasn't a lawyer, but he had enough scare stories about people getting hurt and liability issues that it didn't seem like inviting inexperienced friends along, in a position where it was our equipment and we were the supposed experts, was a good idea.
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Old 05-20-2014, 11:50 AM   #47
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That's right. In the Burns film, Samuel L. Jackson does the voice of Jack Johnson. Perfect casting! And the music is by Marsalis - how great can it get?
Although Samuel L. Jackson seems to do everything.

A self correction, after all these years of thinking the voice was James Earl Jones on Davis' Tribute to Jack Johnson album, Wikipedia said it was some other person. Sigh.
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Old 05-20-2014, 05:03 PM   #48
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We have a foreign asset protection trust based in the Cook Islands, in addition to an LLC. DH is a physician and I was a patent attorney when we set this up, both of which professions having a high risk of being subjected to a very expensive malpractice suit. I'll put in a pitch for our law firm in Colorado that set this up: Integrated Estate Planning and Asset Protection Attorneys. Engel & Reiman pc. Barry Engel invented this type of trust so he is the best person to talk to about this (admittedly) platinum level of asset protection. It is expensive (about $5K/year). It is not bulletproof but does make it much more difficult for a plaintiff to collect a judgment. We also have an umbrella policy to cover the more mundane risks.
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Old 05-20-2014, 05:29 PM   #49
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I think the insurance company might not pay if you are found to be doing something illegal. You are not suppose to hit people or what if you blew your house up making crack in your bathtub? Would your insurance pay?
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Old 05-20-2014, 07:54 PM   #50
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Hi,
The typical poster here will likely be sitting on a hard earned pile of cash.
Lawyers are everywhere as are their potential clients that want your money.
Say you make a mistake behind the wheel, or you (after a life of responsible behavior) get in a fist fight. Someone gets hurt or fakes being hurt.

Insurance is certainly a form of protection, but is it enough? How about trusts?

I'm probably relatively young on this forum (38). So I've had access to protected investment accounts (401k, roth ira) since I started saving. I'm also a government employee and am vested in a pension which has some protections as well.

I do have mid six figures in taxable investments and I protect it with a $1 million dollar umbrella policy, on top of my normal insurance. Its cheap. I think its only like $9 a month.

Other than that, I don't advertise that I have any money. I am a very simple and frugal guy. My living expenses are around $2,000 a month. I don't own a house, I rent. My car is almost ten years old. I don't take expensive vacations. I don't even own a tv. If a thief broke into my apartment they would be disappointed.
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Old 05-21-2014, 07:07 AM   #51
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Just a quick question on primary residence..
If husband and wife are both on the title of the primary residence, and if ONE of them is sued and a judgement is made, which exceeds the insurance coverage and homestead exemption, can the creditor force the sale of the house to collect?
If not, doesn't it offer some "protection" for the remaining spouse for his/her life time, until they decide to sell the house?
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Old 05-21-2014, 07:41 AM   #52
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Just a quick question on primary residence..
If husband and wife are both on the title of the primary residence, and if ONE of them is sued and a judgement is made, which exceeds the insurance coverage and homestead exemption, can the creditor force the sale of the house to collect?
If not, doesn't it offer some "protection" for the remaining spouse for his/her life time, until they decide to sell the house?
In MA the homestead protection is for both even if only one spouse's name is on the title as long as the other is listed on the declaration as a resident. The exemption is 500K then goes up to $1M at the age of 62.

So yes the protection is for both.
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Old 05-21-2014, 07:51 AM   #53
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Sorry if my questions isn't clear..
Can the creditor FORCE the sale of the primary residence to satisfy the judgement, even if the OTHER spouse in not a party to the law suit?
Thanks
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Old 05-21-2014, 07:54 AM   #54
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Sorry if my questions isn't clear..
Can the creditor FORCE the sale of the primary residence to satisfy the judgement, even if the OTHER spouse in not a party to the law suit?
Thanks
Not sure about other states but in MA no. Both spouses have the homestead protection.
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Old 05-21-2014, 07:56 AM   #55
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Sorry if my questions isn't clear..
Can the creditor FORCE the sale of the primary residence to satisfy the judgement, even if the OTHER spouse in not a party to the law suit?
Thanks
Some states (FL, TX) have laws protecting a primary residence from lawsuits. You might find this article interesting:

http://www.nytimes.com/2012/11/03/yo...suit.html?_r=0
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Old 05-21-2014, 10:31 AM   #56
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For me, I recently got the umbrella policy (partly from advice in this forum) .. My other method is camouflage, as people don't see me as rich. I would like however to 'come out' and enjoy a little more of these fruits. I guess the irrevocable trust is the only true protection? I just worry about giving someone else the steering wheel on my cash.
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Old 05-21-2014, 11:12 AM   #57
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Just a couple of points:

1. The laws of each state differ widely as to what can be levied upon by a creditor. For example in PA, the creditor of a husband cannot levy on assets jointly owned by husband and wife. I know people here like to generalize (and that is OK) but the laws really do differ substantially.

2. I carry a 5MM Umbrella. I have obtained quotes to increase the amount to 10MM and 15MM and the cost moves up substantially above 5MM because my agent informed me that the risk is reinsured mostly by Lloyds. I have determined that the cost exceeded the risk in my opinion - for me. My Umbrella is through Chubb and is not very expensive given the relatively high cost Chubb charges for other insurance. I stay with Chubb but that is a story for another day.

3. Normally insurance policies do not insure against intentional torts such as assault -- so try not to punch anyone.......and if you do, it would be better to punch a poor, unemployed senior than a wealthy young surgeon.

4. If you have teenagers, check your insurance policy for host liability.
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Old 05-21-2014, 11:59 AM   #58
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My 7 rental buildings are all owned by a separate LLC for each one. I have an S-Corp I use for property management and signing leases.

I have business liability, business umbrella, personal umbrella insurance.

And I try to do things right.
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Old 05-21-2014, 12:32 PM   #59
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I think the insurance company might not pay if you are found to be doing something illegal. <snip>
Isn't this what liability insurance is for? I don't think it has to be a perfectly legal damage.

I can see where certain policies might have specific exclusions, though.
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Old 05-21-2014, 01:00 PM   #60
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For me, I recently got the umbrella policy (partly from advice in this forum) .. My other method is camouflage, as people don't see me as rich. I would like however to 'come out' and enjoy a little more of these fruits. I guess the irrevocable trust is the only true protection? I just worry about giving someone else the steering wheel on my cash.
As other have noted for many assets, like retirement accounts and your personal residence, it depends on state law, but ERISA protected 401K plans have one of the highest levels of protection and supercede state law -

Is Your Retirement Plan Really Safe?

It is one of the reasons we aren't eager to convert all of the money in our former employer 401Ks early on to Roth IRAs.

One thing I have noticed is that most asset protection web sites and books are written by lawyers who stand to gain from expensive, asset protection geared, irrevocable trusts, but for some of us plebians who just managed to squirrel away enough to pull off ER, some of the less expensive asset protection options might suffice. Some states protect all your retirements accounts and personal residence.
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