Common questions about protecting personal and business assets, and how entity structure fits in.
Asset Protection
Who should be concerned about asset protection?
The more "attachable" assets we own, the more the reward for successfully securing a legal judgment against us. Anyone with significant accumulated assets is more likely to be sued over a dispute than someone with little or no exposed assets. Even families with modest assets may have a home, savings, personal property they expect to utilize for their family security are at risk of attachment.
What is an "attachable" asset?
Assets become attachable if they are titled (registered) in the name of the defendant to a legal complaint. The judge "attaches" a lien to the title of the property to recompense the plaintiff for damages awarded by the court. If the defendant fails to remit the assessed amount of money to the plaintiff, the awarded property is court re-titled to the plaintiff.
Under what circumstances could a court grant a judgment to a plaintiff?
If the plaintiff successfully argues that the defendant’s action or inaction caused damages directly or indirectly by negligence over events they could have or should have taken greater precaution to oversee. This theory of liability is so broad in scope so as to enable skilled attorneys to prevail in ascribing liability to almost anyone even remotely connected to the event.
I have never had a major claim I didn’t settle or have insurance cover. What should I do?
We cannot control what claims may be surfaced against your family in the future. All insurance companies have numerous exclusions from all property and liability policies. All insurance policies have internal limits on claims payout. Some insurance companies are reluctant to pay any sizable claims and end up being litigated, some win, some lose. Divorce, disputes in business and family are not covered at all. Plans are not expected to render you “bulletproof”, plans are designed to give you a leveraged position in negotiations based on the removal of the judgment tool reward normally relied upon by claimants.
Should an affluent person own nothing in order to thwart opportunists?
A well structured program enables ownership in a legal container (entity) that has impediments to attachment. Such entities permit the family to control the asset fully until an attack emerges. The insulative qualities of such containers make it expensive and difficult to outside penetration and thereby render the asset holder unattractive to claims seeking financial rewards.
If I have a Nevada corporation, but I am doing business in California, do I also need a Nevada business license?
Yes. With very few exceptions, you need a Nevada business license even if you are not doing business within the State of Nevada.