Everyone who has been fortunate enough to accumulate assets in today’s economy needs some form of asset protection. In the United States there are more than one million lawyers, each with a license to file lawsuits against deep-pocket defendants by paying court filing fees of $150 or less. Too often, decisions by judges or juries are based more on emotion than on facts or the law, and frequently the result is a catastrophic damage award that wipes out a lifetime of hard work and investment. A well-designed asset protection plan builds a protective fort around the client’s estate and guards family wealth from external creditor attack and frivolous lawsuits. The most effective asset protection fortress contains multiple layers of protection so that even if creditors can defeat one device, there are other defenses around the family’s nest egg. Asset protection is, therefore, an essential fundamental building block of financial planning.
Effective asset protection starts with common sense. For example, in business affairs don’t rely on oral promises and oral agreements which often result in confusion and misrepresentation. If you enter into written business agreements, make sure the agreement is reviewed by a lawyer in advance. A few dollars spent on an attorney prior to signing the agreement can save substantial attorneys fees in the future. Avoid getting involved in business or financial relationships with people you do not trust or people who seem combative and adversarial in nature. Next, make sure you maintain comprehensive insurance covering your house and all vehicles owned in your name regardless of who drives your cars. A supplemental umbrella insurance policy which expands the limits of homeowners and auto policies is an inexpensive and effective asset protection tool. For those individuals with heightened exposure to lawsuits because they are involved in business or high-risk professions, a consultation with a Florida asset protection attorney will acquaint them with legal asset protection tools which can be incorporated into their business plan and family estate plan.
Asset protection will not make you judgment proof. An aggressive and skilled collection attorney can, with enough money and time, attack at least some assets of any debtor. A realistic goal of asset protection is to make it very difficult for judgment creditors to levy on your assets, thereby greatly increasing your your negotiation leverage in settlement discussions.