In the U.S. legal system, the slightest misstep can lead to a huge award or a sizable settlement in a lawsuit. Even without missteps, frivolous litigation is a constant risk.
Self-protection steps include:
* Incorporate any business you create, to protect your assets. For rental property, limited liability companies (LLCs) offer the benefits of asset protection along with partnership taxation.
* Buy sufficient insurance. Maximize liability coverage for your home and auto, then add a hefty “umbrella” policy for excess liability protection.
* Maximize retirement plan contributions. Federal law protects qualified retirement plans from creditors while many states make IRAs creditor-proof.
* Title property with care. Shifting property to another person will allow you to keep that property from your creditors–but that person’s creditors may have a chance to seize it. Joint ownership may protect either owner, depending on state law.
* Put money into a residence. In some states, a “homestead” is off-limits to creditors, no matter how valuable it is.
* Invest through insurance. Some states protect insurance policies and annuities from creditors. You can do your mutual fund investing through a variable annuity or a variable life insurance policy.
Brush Up on Federal Employees Dental and Vision Insurance
FLTCIP: Take Time to Understand Your Federal Long-Term Care Options
Carrying FEGLI Into Retirement
At Halfway Point, 2023 Retiree COLA Count at 5.5 Percent
What Can Cause You to Lose Your FEGLI Coverage
TSP Summarizes New Features Coming in June
The Latest on the WEP and the GPO
Basics of Sick Leave for Federal Workers