Asset protection is something most people never consider. You should. Because civil lawsuits in this country are out of control. Both legitimate and frivolous suits are filed to the tune of billions of dollars every year. The legal system loves it because this situation allows lawyers to keep making a lot of money.
According to various statistics, the average person gets sued three times during their life. Some of these suits are minor and due to disputes with neighbors or family members. Small claims courts is where most of these legal battles are settled. On the other hand, some of the civil lawsuits filed are for millions of dollars.
Someone could fall in front of your house and sue you. If you don’t have the proper asset protection you could end up between a rock and a hard place. Attorneys usually check the public records to see if someone is worth suing. They look to see what kind of assets they can forcibly take from you. These assets include equity in real estate, bank accounts and wages that can be garnished.
Here’s where having a limited liability company can help. From a strict asset protection perspective you can use a limited liability company to protect yourself and your property from civil lawsuits. How? Well, first of all, let me say that I am not an attorney and am not dispensing legal advice. What I am about to tell you is for educational purposes only. You are responsible for your own actions and should seek competent legal advice before doing anything.
Anyway, here’s the deal. Attorneys only sue if they know they will have an easy time collecting… or… if they feel you have enough assets to warrant a legal battle. If you don’t show any assets worth going after most attorneys don’t bother.
You can set up a limited liability company which owns your personal assets. This includes real estate, bank accounts, etc. The limited liability company takes ownership of your property and creates a “veil” of protection. You can also create a land trust for your real estate that is owned by the limited liability company. And you can create a living trust that is also owned by the limited liability company.
Should someone want to sue you they would have a hard time finding anything in the public records tied directly to you. There are more complicated ways to protect your assets using a limited liability company. The idea is to own nothing that is tied to you… but… to control everything. Personal ownership of property and assets (despite popular belief) is in and of itself a liability.
By creating a limited liability company that owns your assets you are to a great extent personally protected. Anyone who wants to sue you would have to dig very deep and pay a lot of money to an attorney to get to you. You may want to check into personal asset protection further by doing some research online and at the library. Because odds are you will be sued at some point in your life.