Thursday, October 18, 2007

Protecting assets if you lose a lawsuit

The Journal's Getting Going column gives practical advice on how to protect assets from creditors if you lose a lawsuit. Surprisingly to me, being sued is a concern to over 2/3 of Americans.

This is one of our big fears. Over 80% of Americans believe there are too many lawsuits, according to a 2006 survey undertaken for the U.S. Chamber Institute for Legal Reform. An earlier survey, conducted for insurer Fireman's Fund, found that 67% of homeowners were concerned they might personally be sued.

In truth, while certain occupations -- notably doctors and small-business owners -- are frequent legal targets, most of us are unlikely to face a personal lawsuit because of, say, a car accident or because a neighbor tumbles down our stairs.

I'm not surprised that 4/5 of Americans think there are too many lawsuits.

Most tips and advice in the column require you to put assets in retirement type accounts, or retitle the assets. I'll highlight the insurance tip :

Get a personal umbrella-liability insurance policy, which might cost $200 to $400 a year for $1 million of coverage. These policies provide extra protection, over and above the liability limits on your home and auto policies.

The link to the book by Chris Riser mentioned in the article is here.