The estate planning needs of high-risk professionals differ from those in most other professions. By going over the tools and strategies that high-risk professionals can use to protect their assets, and speaking with an asset protection attorney who specializes in estate planning, you can protect your estate from lawsuits.
Risks Faced by High-Risk Professionals
A high-risk profession is a profession that requires professionals to expose themselves to dangers that other professions do not involve. This often involves physical risk and financial risk.
Just as an example, while surgeons are rarely in physical danger, they do operate directly on people’s bodies. This means that, if a surgeon makes a mistake while performing a surgery, they can sometimes be held liable for this mistake. By being held liable for a mistake, their personal assets can become at risk.
Out of all the risks that high-risk professionals face, the ones outlined below are some of the most significant:
- A lawsuit directed toward the assets a high-risk professional owns, due to alleged malpractice/errors.
- A creditor who is seeking repayment on debts that are owed due to a high-risk professional’s investments
- A significant financial setback within their business that puts their personal assets at risk.
To conduct proper estate planning for high risk professions, there are estate planning tools and strategies that a high-risk professional must look into.
Essential Estate Planning Tools for Asset Protection
Proper estate planning for high risk professions relies on several essential estate planning tools. By employing the tools outlined below an estate plan, a high-risk professional will be able to protect their assets from lawsuits:
- A will that dictates how a high-risk professional’s assets will be passed on to their chosen beneficiaries, in the event of their death.
- A trust that protects a high-risk professional’s assets while also ensuring that these assets are shielded from potential lawsuits, creditors, certain tax liabilities, and the expenses incurred by the probate process.
- A limited liability company – “LLC,” for short – that allows a high-risk professional’s business assets to be separated from their personal assets, thereby making it harder for those personal assets to be seized.
Outside of the above, there are two tools adjacent to estate planning that make it easier for certain high-risk professional to protect their family member’s security, in the event that something happens:
- A life insurance policy – these are protected from creditors – that, in the event of a high-risk professional’s passing, allows their loved ones to retain financial security and the accompanying peace of mind.
- An advanced medical directive or power of attorney that allows a trusted person to make health care decisions for a high-risk professional, in the event that they are unable to do so.
Every single one of the essential estate planning tools for asset protection outlined above helps high-risk professionals protect their estate and the assets it contains.
Strategies for Protecting Assets from Lawsuits
Five potentially useful strategies for protecting assets from lawsuits are as follows:
- Developing an irrevocable trust that puts their assets into a trust managed by another person, thereby allowing their assets to be shielded from lawsuits; this is in contrast to a revocable living trust – among other types of trusts – that, while effective, fail to shield one’s assets from lawsuits
- Purchasing insurance that protects them from certain types of claims and suits, although this is dependent on one’s profession and the insurance needs of that work.
- Setting up an LLC that separates all of their business assets from their personal assets, thereby insulating the majority of their net-worth from most claims; only their investment in the business is liable, as opposed to their personal assets.
- Maximizing their contributions to their retirement plans, such as 401Ks and IRAs, as creditors rarely have the ability to access these funds or to obtain assets from them.
- Transferring their most notable assets to their spouse, thereby protecting those assets from lawsuits directed at them and their actions, specifically; divorce can lead to these assets being taken away, though, making this a risky strategy.
The asset protection strategies clarified in the bullet points above allow high-risk professionals to protect their most valuable assets in the event of a lawsuit.
Contact a St. Louis Estate Planning Attorney Today
The information outlined above comes with a disclaimer: All of these estate planning tools and asset protection strategies may be useful, but only some of them will be right for your exact situation.
If you are a high-risk professional who would like to protect your assets from lawsuits, then please contact a St. Louis asset protection attorney today.
Our law firm will go over the assets within your estate, your estate planning goals, and your concerns, thereby allowing you to find the asset protection and estate planning strategies that are right for you.