Some advisors strongly recommend that you retain at least enough liability insurance to get the help of an insurance company's legal staff - but not enough to be attractive to a creditor after the legal fees are paid. And, it's not advisable to cut back on your insurance coverage right away. Reduce your coverage gradually or increase your deductibles in order to reduce your premiums. It isn't reasonable to expect an asset protection plan to protect every dime you have from every possible legal contingency. The most practical approach is to use an asset protection plan to safeguard enough assets so that you can start over if you ever become the victim of a ruinous lawsuit.
Asset protection is much like investment diversification.
It doesn't make sense to put all of your investments into one mutual fund in order to get diversification. In a like manner, it makes better sense to utilize an assortment of asset protection devices, with some of your assets being in a trust outside the U.S. and beyond the reach of anyone. One of the most effective forms of asset protection involves the transfer of legal ownership of property to your children and grandchildren, even though you may retain control of the property. This will usually result in substantial income tax and estate tax savings as well as creditor protection. Further details about protecting your assets from future lawsuits are available in our subscriber's web site .