ASSET AND LAWSUIT PROTECTION

Various forms of lawsuits are now a constant threat to individuals and corporate entities. A successful lawsuit in Florida is much like winning the lottery. The judgment can equate to total loss of all assets of an individual or corporate entity with bankruptcy the end result. Insurance can only provide limited protection, and once a lawsuit has been managed by an insurance carrier, your coverage costs become increasingly expensive, and eventually coverage may not be obtainable. With the frequency of multimillion dollar judgments, the judgment often exceeds insurance coverage leaving assets exposed.
Premise liability is prevalent. If you own real estate, whether its your primary residence, or a secondary vacation home or income producing property, your assets are exposed to a high risk of loss. Owners of property in Florida owe a duty to any person on their property, even trespassers, to fix any dangerous conditions on the premises. Landlords have a duty to warn tenants of any unreasonable risk of harm of which either the landlord knew or should have known. Business owners can be subject to liability even for crimes against their clients or invitees permitted on the premises. Employers are vulnerable to lawsuits from various sources including contract violations, sexual harassment and discrimination. Partners can be held liable for the acts committed by other partners. Courts have also imposed liability on all members of a joint enterprise when persons outside the enterprise are injured. Many corporate officers learn too late that under many circumstances a court can pierce the corporate veil and reach the personal assets of the officer. Car owners can be held liable for injuries caused by other persons who drive their cars. These duties have been the basis for a proliferation of personal injury lawsuits in Florida since our law first evolved in the United States from its birth in Europe.
The answer is careful planning for asset and lawsuit protection. Whether you are an individual with substantial assets (and substantial is relative), or a corporation with substantial assets, holding your assets in a limited partnership or corporation, and then transferring your interests in the partnership or shares in a corporation to a trust, provides you with invaluable asset and lawsuit protection. To receive the most protection possible, an irrevocable trust is preferable. If the trust is revocable by its terms, a revocation can be required under certain circumstances, thereby exposing your assets. In some instances, the use of two revocable trusts can alleviate the need to make a trust irrevocable.
Mark Rutecki & Associates' representation includes thorough consultation in deciding whether to use a partnership as opposed to a corporation, and in deciding to use an irrevocable trust or a revocable trust; and preparation of all necessary documentation and filing requirements.