ElderLaw News-The Estate Planning & Elder Law Firm, P.C. — MD, VA, DC
ElderLaw News
ElderLaw News is a weekly e-newsletter that brings you reports of legal developments and other trends of vital interest to seniors and their advocates. This newsletter is brought to you by The Estate Planning & Elder Law Firm, P.C., William S. Fralin, Esq., President., William S. Fralin, Esq., President.

Asset Protection: What can I do to protect my assets in the event of a lawsuit?

Even if we are not in high risk professions such as medicine or law, lawsuits are frequently brought as the result of auto accidents or accidents to others in your home.

What can you do to protect your assets?

For a married couple, one of the easiest forms of asset protection is to hold title to property as tenants by the entirety. Married couples can hold real and financial property (e.g., homes, and investment and bank accounts) as tenants by the entirety. When assets are held in this fashion, the creditors of one spouse cannot force the sale or partition of the asset held as tenants by the entirety. If the debtor spouse dies first, the surviving spouse takes title to the asset free of the deceased spouse’s creditors’ claims. Of course, if the surviving spouse is the debtor, then upon the death of the first spouse, the asset is available to the creditors. This protection is only available to married couples, and it does not protect the assets from the debts incurred by the spouses jointly (like a mortgage, typically).

Another option and probably one of the most overlooked ways to protect your assets is personal liability umbrella insurance. Approximately 20% of people with considerable wealth do not own one of these policies. An umbrella policy pays after your car and homeowners’ insurance has reached the limits of its coverage. In many cases, that amount may be below $500,000. In the event that a liability award is made against you in excess of the policy limits, your personal assets would be at risk. By purchasing an umbrella policy, you can protect your personal assets to a greater extent. Of course, you need to make some effort to match the amount of coverage in the umbrella policy to your assets with a little cushion to spare in the event of a verdict or settlement slightly in excess of your net worth. For instance, if your net worth is in the $1 million range, it makes sense to obtain an umbrella in the $2 million range. The truly remarkable thing about the umbrella policy is how affordable it is. Insurance for one home, two cars, and two drivers may be well under $500/year for $1 million in umbrella liability.


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The Estate Planning & Elder Law Firm, P.C.

The Estate Planning & Elder Law Firm, P.C. is an elder law firm. We represent older persons, disabled persons, their families, and their advocates. The practice of elder law includes estate planning, estate and trust administration, powers of attorney, advance medical directives, titling of assets and designations of beneficiaries, guardianships, conservatorships, and public entitlements such as Medicaid, Medicare, Social Security, and SSI, disability planning, income tax planning and preparation, care management, and fiduciary services. For more information about The Estate Planning & Elder Law Firm, P.C., please visit our website at http://www.chroniccareadvocacy.com.

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This newsletter is not intended as a substitute for legal counsel. While every precaution has been taken to make this newsletter accurate, we assume no responsibility for errors, omissions, or damages resulting from the use of the information in this newsletter. The Estate Planning & Elder Law Firm, P.C. thanks the law firm of Hook Law Center for their input to this newsletter.

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