Asset Protection Planning is Often Possible After You Have Creditor Issues

Posted on October 28, 2011 by Ken Laino

It is clearly better to engage in asset protection planning before you have any creditor issues.  But planning after a lawsuit has been filed -- or even after a judgment has been entered against you -- is frequently possible.

State fraudulent transfer statutes vary in a number of respects.  But as a general rule, a conveyance is voidable (i) if there is intent to improperly prevent a current creditor from collecting against you or (ii) if the transfer would make you insolvent.  See for example Section 1336.04 of the Ohio Revised Code. 

Stated another way, you are not always prevented from transferring assets just because there is a lawsuit or judgment pending against you.  For example, lets say that you have a net worth of $1 million and a judgment against you for $10,000.  As long as you have no other known creditor issues, that $10,000 judgment does not prevent you from protecting the other 99% of your assets.

Again, it is clearly better to engage in asset protection planning before any creditor issues arise.  But trasnferring assets after a lawsuit has been filed or even after a judgment has been entered may, under many circumstances, still be appropriate and advisable.

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Review Your Current Insurance Coverage

Posted on October 27, 2011 by Ken Laino

Asset protection attorneys assist clients with domestic and offshore trusts, limited liability companies, and a variety of other asset protection alternatives.

I have recently reminded a number of clients, however, that they should not overlook one of the simplest and most effective asset protection strategies -- insurance.

When was the last time you reviewed all of your insurance policies?  While you may have health, life, homeowners, auto, professional malpractice and other insurance, have you recently analyzed whether your coverage is adequate?  Things change very quickly these days, and the amount of insurance you had five years ago may no longer be adequate.

I realize that insurance costs money, so there is always the issue of how much is too much.  But for anyone with significant net worth, it is highly advisable to err on the side of having a bit a more insurance than less.

An umbrella policy is a great way to get extra liability insurance coverage for a relatively low cost.  This type of policy provides excess coverage for your auto, home and possibly other insurance policies.

Insurance does not cover all risks.  So a thorough asset protection review certainly does not end with your insurance coverage.  On the other hand, insurance should certainly not be overlooked; and it can be a very important part of an asset protection plan.

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