All assets have inherent risks to creditors and lawsuits. However, these risks and vulnerabilities can be affected by the actions of individuals as well. Assets can be put at risk by multiple vulnerabilities, including:
- Professional malpractice liability,
- Personal liability of corporate officers and directors,
- Lawsuits by former business partners,
- Personal injury suffered on your premises or in a vehicle accident,
- Liability as guarantor for the debts of another,
- Liability arising from misconduct.
The odds are very good that you will face costly litigation at some point in your life. Even a seemingly minor lawsuit can potentially place your valuable assets at risk. In particular, business owners, professional practitioners such as doctors, dentists, lawyers, and accountants, and property owners are frequent targets for lawsuits. However, everyone should be aware of their unique risk of getting ensnared in litigation.
The best way to avoid this situation is to incorporate an asset protection plan into your estate plan to keep your assets cordoned off from potential bad actors.