Protecting assets from lawsuits

[Brat]

FL is one of the few states that protects a resident's home from litigation without regard to value. Sink all the cash you can afford in your home (pay off your mortgage). IRAs (Roth and traditional) are also protected so fatten them up as much as you can. Then make sure your insurance covers litigation. As others have mentioned don't come across as someone with a chunk of change.

 

[ShokWaveRider]

FL is one of the few states that protects a resident's home from litigation without regard to value. Sink all the cash you can afford in your home (pay off your mortgage). IRAs (Roth and traditional) are also protected so fatten them up as much as you can. Then make sure your insurance covers litigation. As others have mentioned don't come across as someone with a chunk of change.

I think you will find Annuities are also protected in Florida.

 

[meierlde]

Apparently if you have a distinct bank account into which you deposit your social security money only it is also protected. Never deposit any other money into that account.

 

[Helen]

Apparently if you have a distinct bank account into which you deposit your social security money only it is also protected. Never deposit any other money into that account.

I have not heard this before. I will have to look into it.

 

[Ready]

I happily carry a $5M umbrella policy for peace of mind. And I try really hard not to piss anyone off.

And yet, I've still been sued twice in the past four years. And the insurance did not cover either lawsuit. Live and learn.

 

[zack59]

I happily carry a $5M umbrella policy for peace of mind. And I try really hard not to piss anyone off.

And yet, I've still been sued twice in the past four years. And the insurance did not cover either lawsuit. Live and learn.

That's scary, care to share any details?

 

[pb4uski]

Never sued anyone and never been sued... never even had an arbitration. $2 million umbrella costs me $341 the most current year. Sleep soundly.

 

[pb4uski]

Very poor advise.

What advice are you objecting to? There was none.

 

[meierlde]

I have not heard this before. I will have to look into it.

A link:
https://www.thebankruptcysite.org/r...ing/is-social-security-safe-during-bankruptcy

 

[zack59]

A link:
https://www.thebankruptcysite.org/r...ing/is-social-security-safe-during-bankruptcy

I saw another thread about this and it seemed to conclude that only 2 months of checks were exempt. This link seems to state its unlimited.

I wonder how you can not comingle the SS funds with even one non SS dollar.
Won't it require a non SS dollar to open a separate account to have the SS checks deposited into?

 

[Cayman]

Comments and advice here can be helpful, but always check with your attorney.
Someone in this thread suggested to title your kid's car is their name only.

I am not an attorney, and I am not advising anyone. My insurance agents in this state and in another state (I live in 2 states and have assets in both states) told me that I can be held liable for any auto accident that my college age child has because I pay the college bills. Even though my 21 yo child paid cash for the car, titled it in their name only, and insured it in their name only, and the auto insurance bills are sent to my child's full-time apartment address and ins. bills are paid by my child. (it's totally absurd that I'm liable, but that's another thread)

So, if you have questions/concerns about asset protection consult an attorney or an appropriate professional. And, thanks everyone for the discussion as this topic is important to us all.

 

[OnTheBeach]

Per my legal counsel's advise, I have an umbrella policy as well as putting assets in a Delaware limited partnership.

 

[Sunset]

Apparently if you have a distinct bank account into which you deposit your social security money only it is also protected. Never deposit any other money into that account.

I suppose if you never spend your SS, that could build up, but otherwise it's just going to save one from going to the food bank.

 

[Sunset]

.....
As others have said, an Umbrella Liability Policy is what you (and everyone else) should have. They are readily available and quite reasonable. One of the most important features of these policies is that they provide defense coverage, usually above and beyond the limit of coverage. Insurers don't want to see a judgment settle for any more than you do since it's their money on the line. They will fight hard to defend you and basically hold your hand through the whole traumatic event of a lawsuit. With adequate limits of coverage an excess verdict is very rare. Make sure you have enough liability coverage to protect what you have to lose. One size does not fit all.

.....

+1
I feel as long as the insurance company is going to be paying the first $2 Million, that they will fight hard.
Of course nothing stops someone from suing for much much more, in which case I'll be glad I have $$ in an IRA and 401K, and a sleeping bag...

 

[bingybear]

Comments and advice here can be helpful, but always check with your attorney.
Someone in this thread suggested to title your kid's car is their name only.

I am not an attorney, and I am not advising anyone. My insurance agents in this state and in another state (I live in 2 states and have assets in both states) told me that I can be held liable for any auto accident that my college age child has because I pay the college bills. Even though my 21 yo child paid cash for the car, titled it in their name only, and insured it in their name only, and the auto insurance bills are sent to my child's full-time apartment address and ins. bills are paid by my child. (it's totally absurd that I'm liable, but that's another thread)

So, if you have questions/concerns about asset protection consult an attorney or an appropriate professional. And, thanks everyone for the discussion as this topic is important to us all.

I find that a bit surprising unless your college support is more than half his support. I would think he would be your dependent if you paid half his support which would likely make who pays the insurance irrelevant. (my assumption. It would be easy to have tuition room and board be the majority of support.

 

[Dancfo]

I think most all states protect IRA money, and in Florida, at least, annuities are also generally protected. However, recall that the recent Supreme Court ruling eliminated bankruptcy protection for non-spousal inherited IRA's, although some states do still offer protection.

As a previous post mentioned, layering of LLC's, LP's, etc. is also another option. In general, the idea is to remove legal power to access the money from the person trying to protect the money. In the LLC/LLP scenario, I may only have a 1% controlling interest in something, but 99% ownership interest. I know this is a simple example, but conceptually the point. This method also attempts to make the process of enforcing a claim so convoluted and time consuming it places roadblocks to the person suing you. This would seem more effective in reducing unwarranted lawsuits, because the person would not want to incur a large expense if you were not truly liable for something.
With a trust, a similar concept applies. If I place funds irrevocably into the trust, and I turn over control to a third party, suing me does not force the trustee to distribute funds to satisfy a legal claim. Some trusts explicitly contain language that allows the trustee to stop making any distributions if the beneficiary is subject to any enforceable claims.

 

[ExFlyBoy5]

The best thing is to talk to local counsel about your options. Laws vary wildly across states and even the bankruptcy (federal) courts will apply state law during many aspects of a case.

 

[REattempt]

WRT a child driving a car that is titled to you and insured by you, at least in our state, one cannot transfer liability for the actions of another. We have no ownership statute.

You could be held liable if there was negligent entrustment (you knew your child was drunk, under the influence or some other reason to believe they were a danger).

 

[Chuckanut]

A good umbrella insurance policy can provide a lot of peace-of-mind for not much money.