Protecting Your Ass(ets) Should You End Up In Court

Cute title, eh?

Today’s Getting Going column, Protecting Your Assets in Case You Find Yourself in Court (Free), reminded me of my own story…

Several years ago I was involved in a fairly minor fender-bender. The lady that I ran into (the accident was my fault) got out of the car and was standing on the side of the road. She appeared to fine, just a little put out by the whole deal. She was a runner for a local dental office and the car belonged to her employer. Anyway, she told me that she had been involved in another accident not to long before our accident.

Everything seemed to be fine and dandy and I had actually forgotten about the deal until a year later when I got a call from my insurance company telling me that I was being sued. The lady claimed her foot was broken during the accident and that she was suffering from a back injury. I was both scared and ticked off! Her foot was perfectly fine when she was standing on the side of the road! Her lawyer was a TOTAL jerk (as most of those kinds of lawyers are). I could tell that they were just looking for a nice little payday and that this suit was bogus.

Anyway, the case was eventually settled for a relatively small sum of money but it scared the daylights out of me. I mean, what could have happened if this case had gone to court and a judgment was found against me that beyond what my insurance company would pay? I could have lost my entire CD collection! LOL!

Seriously though, Jonathan’s column offers up five ways that people can protect themselves:

1. Get a personal umbrella policy. This is a no-brainer. You’ll have to increase your auto coverage before you can purchase an umbrella policy. However, once you do that, you’ll find that the umbrella policy will only cost you $200 – $400 per year. That’s cheap insurance.

2. Max out your retirement plans. According to the article, your 401(k) should be protected from creditors. I’m not sure why the word “should” is thrown in there but it is.

3. Know your state’s laws. Jonathan suggests typing in your state’s name and the words “asset protection” to find out more information on your particular state. It might also be worth it call your attorney and ask them the basics.

4. Consider owning assets jointly with your spouse. Consult your attorney before you make any title changes because some changes could mess up your estate plan.

5. For those who have assets of $5 million or more. Clements suggests looking into more sophisticated protection like trusts, limited partnerships and limited-liability companies. For those, you’ll definitely need an attorney.

Clements also mentions a book that might be helpful on this topic: Asset Protection: Concepts and Strategies for Protecting Your Wealth (Affiliate Link). I haven’t read this book.

15 thoughts on “Protecting Your Ass(ets) Should You End Up In Court”

  1. Always take plenty of photos at an accident (now I’m thinking you might want to include the other driver in those photos also) and keep them in your insurance file. I personally keep one of those disposable cameras in my gloveboxes, but the ease of cellphone cameras works, too.

    I wonder how she claimed to have a broken foot? It’s pretty hard to fake an xray! There is no shortage of scum in America.

  2. Make sure if you title assets jointly you do so as tenants by the entirety, not joint with rights of survivorship (JTWROS). Tenants by the entirety will protect your assets if you get sued. However, if the suit is for both spouses then it provides zero protection. JTWROS doesn’t provide this protection.

  3. My husband was just in a car accident where he really was injured – broken arm. The break is particularly nasty, in that it is actually up in the elbow joint, so it has affected his movement – that is, he will never regain full movement of his right arm. not good. At the scene, the poor kid who hit him was completely out of it – much more injured than hubby was. He was in NO shape to take pictures of any sort (though we did). In this case, the officers on the scene ticketed him, but, as far as I know, they did not take any photos of the scene. There was an accident report, though. The accident report included the officer’s account, the witness statements, and the on-scene injury reports.

    Point being: if you are in an accident and unable, for whatever reason, to take pictures, get a copy of the accident report as soon as possible. It may contain very useful and helpful info. I am told that in other counties, pictures are often included in the accident report.

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