Successful civil lawsuits against you, whether from malpractice, bad debts, or failed businesses, can result in large judgments against you. Creditors attempting to collect on those judgments are likely to look to any assets you own to satisfy those judgments. By engaging in careful asset protection planning, we can help you avoid the loss of assets you have worked to accumulate over the years. A Florida asset protection lawyer at Kramer Green can evaluate your situation and determine the best forms of asset protection for you.
If you have been sued in a civil lawsuit and a creditor obtains a judgment against you, no law requires you to pay that judgment. You can use all legal means available to protect your assets. You simply must not engage in improper transactions designed to defraud creditors.
The types of available asset protection vary widely, and which ones are right for you depend entirely on your unique circumstances. The following examples are common forms of asset protection that may be useful in shielding your assets from civil lawsuits:
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Appropriate Insurance Coverage
Maintaining appropriate insurance coverage is one of the best ways to protect your assets from civil lawsuits, especially when you are married and cannot avoid joint liability with your spouse. For example, maintaining substantial liability insurance with umbrella coverage is the best way to protect assets against a civil lawsuit from a motor vehicle or boat accident. Professional liability insurance in an adequate amount is also essential for protecting assets from civil lawsuits. Malpractice insurance is available to cover doctors and lawyers, and fiduciary insurance covers alleged breaches of fiduciary duty. Other types of professional liability insurance might include personal disability income insurance, business vehicle insurance, commercial renter’s insurance, corporate officer insurance, and worker’s compensation insurance.
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Florida Homestead
The Florida Constitution protects an individual’s permanent and primary residence from the reach of creditors attempting to collect debts in civil lawsuits. To qualify for homestead protection under Florida law, an individual must own the property either individually in his or her name or as a beneficiary of a revocable trust. In addition, the homestead is limited to a home of any value situated on less than ½ acre within a municipality or less than 120 acres outside a municipality. The Florida homestead is among the most generous in the entire country, although this type of asset protection may be diminished in some cases if the individual files for bankruptcy.
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Tenants by the Entireties
Under Florida law, spouses who jointly acquire real or personal property during their marriage own them as “tenants by the entireties.” Since property owned in this manner is owned by a single entity under the law, neither spouse can involuntarily transfer or encumber the property without the other spouse’s permission. As a result, these marital assets are not reachable by creditors to satisfy the individual debts of either spouse.
Although assets held as “tenants by the entireties” are exempt from execution to satisfy the individual debts of either spouse, a creditor can reach them to satisfy debts that the spouses jointly own. Furthermore, owning an asset as “tenants by the entireties” may not extend to IRS and certain other debts owed to the federal government.
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Limited Liability Companies
Florida Statutes §605.0101 et seq. sets forth the Florida Revised Limited Liability Company Act. Forming an LLC is a common way for small business owners to protect their assets from creditors of the business. Unlike in a corporation, the individual’s membership interest in a multi-member LLC is not subject to the claims of creditors to satisfy debts. The only remedy for creditors is a charging lien on any LLC distributions to the individual. Of course, if the LLC makes no distributions, then the creditor can collect nothing. Individuals who choose to use the LLC as a method of asset protection should have specific provisions in their LLC’s operating agreement that support asset protection goals.
Allow Us to Help You Protect Your Assets Against Civil Lawsuits Today
An asset protection attorney at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. can provide you with the assistance that you need to protect your personal and business assets from creditors. We know how to provide you with the maximum asset protection available to safeguard the wealth that you have worked to accumulate over time. Call us today at (954) 966-2112 or contact us online to set up a time to discuss your legal issues with our experienced asset protection lawyers.