Asset protection planning involves making prudent decisions today to protect yourself, your family, your business, and your hard-earned assets from loss due to lawsuits, creditors, or bankruptcies. This type of legal planning is necessary for professionals and business owners as well as for individuals whose personal assets could be at risk if they are sued or need to qualify for public benefits.
It is common to believe you don’t need asset protection, but the fact is, anyone can benefit from this legal process. Asset protection keeps your assets and property safe against any potential risks and ensures your beneficiaries receive what you’ve promised them.
There are several risk management strategies that are useful when trying to protect your assets. They include:
- Exempting Assets. In North Carolina, state and federal laws exempt some of your assets from the claims of creditors. You may be able to convert non-exempt assets into exempt assets. A listing of North Carolina’s exempt assets can be found here.
- Limiting Liability for Professionals and Business Owners. Although many entrepreneurs operate their businesses as sole proprietors rather than through a legal entity like a Limited Liability Company or Corporation, limiting your liability is essential to protecting your assets. When lawsuits are brought against a sole proprietorship, they target the owner’s personal assets. On the other hand, lawsuits against a legal entity are lawsuits against the entity’s assets. By selecting an appropriate legal entity to manage your funds and assets, you’ll be protecting your personal assets against getting sued.
- Transferring Risk with Insurance. Another effective form of asset protection is making sure your liability insurance and other insurance policies are up-to-date, managed, and transparent. You can’t afford to fall prey to a loophole in your insurance agreements.
Frequently Asked Questions
What does an asset protection lawyer do?
An asset protection lawyer does exactly what the name implies – they help you protect your assets. They find legal ways to shield your assets and property from civil judgments, bankruptcies, creditors, and other liabilities. They may use many different methods for accomplishing this task from asset protection trusts to specialized corporate structures. Their ultimate goal is to help their clients retain their property and assets if they are ever subject to excessive liabilities or need to qualify for public benefits.
How can I protect my assets from a civil lawsuit?
There are several different ways to protect your assets from a civil suit. Some of the most common methods include asset protection trusts, corporate structures, and simply retaining the asset in someone else’s name like a spouse or business partner. Setting up the appropriate business structure for your company can help shield your personal assets from any potential suits. You might also consider purchasing insurance to help protect yourself. Make sure that the insurance you purchase covers the types of liabilities that you may be responsible for and that the policy limit is high enough for your potential exposure. An experienced asset protection firm like Salines-Mondello Law Firm, PC can walk you through each of these methods and advise which one is right for your situation.
What is the best trust for asset protection?
The answer to this question depends on your specific situation. If you need the most flexibility from your trust, then a revocable trust is the way to go. As the name implies, these types of trusts can be revoked and changed as often as you like. However, an irrevocable trust provides the highest level of asset protection and larger tax benefits. You should consult the help of an experienced asset protection lawyer to help you decide which trust is right for you.
What assets are exempt from a lawsuit?
State statute exempts certain property from being threatened by a lawsuit. While the laws vary in each state, North Carolina lists some specific types of property that are protected from a civil lawsuit against you. A few examples of these include the following:
- Certain real or personal property used as a residence
- Employee group life insurance benefits
- Proceeds from public pension plans
- Specific personal property such as a burial plot, health aids, or a motor vehicle
- Public benefits like workers’ compensation, aid to blind, or unemployment compensation
- Tools of your trade used to perform your occupation
The rules for exempting any of the property above are quite strict. Therefore, it is extremely important to consult the help of an experienced asset protection attorney to help you keep your property safe from potential lawsuits.
At Salines-Mondello Law Firm, PC, our estate planning and asset protection attorneys are fully equipped to help you through various risk management strategies. We can help you identify assets to transfer to your legal entity, as well as help you convert some of your non-exempt assets to exempt assets. Our team also offers expert reviews and qualified counsel regarding liability and asset insurance policies and can identify any issues with your current plan.
If you need the assistance of a specialized asset protection attorney in North Carolina, don’t hesitate to call our office by phone at (910) 777-5734 and schedule your first, fully confidential consultation.