At Mika Meyers, we strive to minimize our clients’ liability exposure to every extent possible. Having sufficient liability insurance coverage is the first line of defense. A good estate plan, however, will take into account liability exposure beyond insurance coverage in determining the estate planning documents to use and how assets should be owned.
If you are unmarried, your options for asset protection are somewhat limited. A revocable trust does nothing to protect your trust assets from exposure; however, Federal law protects certain retirement plans from creditors. There is a variety of methods for protecting assets, including placing them in an irrevocable trust, establishing an LLC or other corporate entity, titling automobiles in the name of the primary driver alone, etc.
For a married couple, there are a few more options available to protect assets. For example, one alternative is to move ownership of some assets from the spouse who is involved in a riskier occupation or activity to the other spouse. A married couple may also own assets as “tenants by the entireties.” This term refers to a special form of joint ownership between married persons that protects assets from claims against only one of the spouses. In other words, an asset owned as tenants by the entireties does not become part of a decedent's estate at death; rather, it passes directly to the other spouse, free of claims by the decedent’s creditors.
For more information and assistance, contact an Estate Planning attorney at Mika Meyers.