One of the questions we get from time to time is, "How do I protect my estate if I get sued?"
This is a slippery slope. The reality is that most consumers have liability insurance and they don't worry too much about getting sued and losing everything they own. But it seems that when "something happens" - like a car accident or some other event where one foresees personal liability exposure - panic sets in and the consumer immediately wants and needs to know what they can do to protect their assets.
For starters, the best time to protect your assets from lawsuits is NOT after an event happens that might trigger personal liability.
On another note, it is likely that you own some assets that are exempt from creditor claims, and you likely own some assets that are not exempt from creditor claims. Each state's exemption laws may be different so check with someone in your state who has a good understanding of your state's exemption laws.
Know that this can be a complicated topic, but when you do discuss asset protection with a professional, you'll likely discuss the exemption status of life insurance cash value, annuities, retirement accounts, limited liability company protection, and which types of trusts can provide you with creditor protection. If you discuss setting up trusts for asset protection, the discussion will likely move toward irrevocable spendthrift trusts in some form.
This is an area where it pays to get informed early - before something happens - and, if can't sleep at night because you are worried that a lawsuit, frivolous or otherwise, could wipe you out, then take whatever action you deem necessary to give you the peace of mind that your estate is protected.
This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.
Louisiana Estate Planning Attorney
Phone: (225) 329-2450