Lawsuits can be devastating. Unfortunately, for many professionals, lawsuits are common. If you are worried about a lawsuit against you or your beneficiaries then you may benefit from knowing that there are ways to protect your assets. Here is what you need to know about asset protection.
Who Needs Asset Protection?
Most people may be able to take advantage of asset protection. Most hope that they never need to use it. The point of asset protection is exactly how it sounds. It keeps your assets safe. To need asset protection, you need to have a net worth. Those who need asset protection more than others include doctors, lawyers and anyone who is at risk of frequent lawsuits.
If you could potentially face a crippling lawsuit, then you need asset protection. Doctors, for instance, even with malpractice insurance could lose everything due to a high judgment. They may have to surrender all their assets. Asset protection would keep some of those assets safe. Insurance can help but it is not always enough. Extra padding can help.
Others who may benefit include newly married individuals. If you have significant assets, a prenuptial agreement may not always be enough to protect you. It also helps to have asset protection if you may end up in a nursing home. Nursing homes look at your assets to pay for treatment, before looking to Medicaid for payment. Don’t let the nursing home drain your assets.
What Happens With Asset Protection?
Often, in an asset protection plan, you would enter into a trust agreement where you surrender some control over your assets. In turn, your assets are protected. The idea behind trusts is to put distance between yourself and your assets. If you are legally separated from your assets, then no one can collect your assets when you have a judgment against you. In addition to trusts, you can also set up a limited liability corporation. In this case, then a creditor may be able to go after LLC assets but not your assets.
There are several different types of protection plans that you could choose when trying to protect your assets. Without protection, if you face a lawsuit, you could potentially lose all of your assets. A protection plan is crucial if you have a net worth or valuable assets. Set up a consultation with an estate planning lawyer, like an estate planning lawyer from Klenk Law, as soon as possible to find out more about asset protection.