Protecting yourself from lawsuits that are suspiciously designed to capture your assets is no easy feat. The more assets you have, the more preparation you need to keep them yours. Even if you’re not the type who flaunts a Ferrari, a yacht, and a mansion, you’re still exposed if you have any assets at all. The rule of thumb is, if you have any assets at all, you should get some protection.
For Business Owners
Personal assets are different from business assets, and they should stay that way. Business entities such as corporations and LLCs (Limited Liability Companies) are designed for business; they are not to be used for personal assets. If you piggyback your personal assets on your business entity, you are actually increasing your exposure should a savvy creditor get a whiff. Use a trust for your personal Utah asset protection.
For Those Already Facing a Claim from Creditors
This is the scenario you could have avoided had you planned your protections earlier. The court will probably not side with you if your actions are suspicious, and scrambling to protect your assets when a creditor is already knocking on your door is highly suspicious. The court will see this as a fraudulent conveyance and will likely rule against the transfer. This is practically the same as leaving your assets unprotected, with that slight difference of exposing you to more legal problems.
ERISA-qualified (Employee Retirement Income Security Act) retirement plans are allowed unlimited asset protection by federal law, so use your retirement accounts. An IRA or individual retirement account is allowed up to a million dollars in assets in case you go bankrupt. Find out where your State stands on these matters.
The best way to protect your assets from being seized is to prepare early while there is no sign of trouble at all. Talk to your lawyer about ways to do this legally.