Asset Protection...Important Considerations for Owners of Real Estate

Here is a true but unnerving factoid...it is estimated that between 50,000 to 60,000 lawsuits are filed each day in the United States! Not only is this a staggering amount, but it is sobering...An even sadder fact is that a majority of these lawsuits are frivolous and have no merit...just people attempting a "money grab".

The U.S. is one of the few countries where lawyers are allowed to take cases on a contingency fee. This style lends toward predatory litigation...something that should concern each individual, no matter what their level of success.

Successful people worry about protecting their personal and/or business assets from future potential creditors. There are various strategies to keep your property safe from accident victims, tax collectors, health-care providers, credit card issuers, business creditors, and creditors of others.

To insulate your assets, you need to evaluate all your strategies to make sure that you are adequately protected.

We work all our entire lives to accumulate some personal assets that will allow us to enjoy ourselves as we get older. The threat of a lawsuit, even one without merit is frustrating and of a concern as one lawsuit could easily wipe out all the assets that you have accumulated.

There are simple steps that one can take to protect their assets from illegitimate creditor claims. You can begin by reviewing and increasing your personal liability coverages on your home and vehicles. An "Umbrella Policy" is a highly advisable tool to give you a higher level of asset protection.

The first rule in asset protection is to take proactive steps to prevent the creditor from knocking on your door. You need to have a well-defined plan of action in place prior to a claim getting filed against you. Once the claim is filed, it is difficult to protect your "unprotected assets" without causing more harm than good.

The more you have to protect, the more complex your strategy will become. If you fall into this category, it is highly advisable that you should hire a competent attorney and a professional financial adviser to guide you in the most proactive way.

You do have some protection of your assets under the law. Your wages may be garnished only to pay child support, back taxes and defaulted student loans. Asset accounts such as retirement plans, profit-sharing plans and pensions can't be seized by creditors. Creditors are also not allowed to touch the cash value of a life insurance policy or to attach the death benefits from the policy.

We will further discuss various strategies in upcoming posts...strategies that are "Empowering".