When Insurance Fails

Gary FalesAsset ProtectionLeave a Comment

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I had a client call in today with a sad story.  He is in the service industry and was working for a company that is no longer in business.  While he was working there, a claim arose based on some work he provided.  However, when the company closed its doors, it stopped paying for the professional liability insurance.

Now, the client is being sued and there is no insurance to pay for the claim.

I created a Nevada Asset Protection Trust for the client two months ago, but there are two problems.  First, the client didn’t move any assets into the trust.  Second, even if he had moved assets into the trust, because the trust was only created two months ago there hasn’t been the required 2-year seasoning for the assets.

If the assets had been transferred before she had any knowledge of the claim, he would have at least had the opportunity to argue that it wasn’t transferred with any intent to hinder, delay or defraud the plaintiff.  But transferring the assets now–after the lawsuit is filed–prohibits her from innocently transferring the property to the trust or anywhere else.

We can be sued by anyone, at any time for any reason.  If we aren’t dealing with any claims or lawsuits, then this is the time to protect.  Otherwise, it will be too late.

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