Asset Protection Attorney in Ohio Explains Inside-Out and Outside-In Liability
June 22nd, 2012
Asset protection attorneys in Ohio must protect clients’ assets from both personal lawsuits and lawsuits involving their business or real estate. Loss of assets can be avoided in liability lawsuits and business litigation.
Many people don’t realize their assets can be attacked from two different directions and that asset protection plans need to account for both. In the asset protection industry we refer to them as “inside-out liability” and “outside-in liability.”
Inside-out Liability — This refers to the vulnerability of personal assets to lawsuits that originate against a person’s business or real property. A good example is a surgeon who makes a mistake during surgery and causes further injury to the patient. The surgeon’s personal assets, including his house, could be vulnerable if the patient files a lawsuit. The liability originates “inside” the business and attacks assets “outside” the business.
Outside-in Liability — This refers to the vulnerability of a business and business assets or real property to lawsuits against the business or property owner. A business owner, for example, might cause an accident while driving his personal vehicle for personal reasons. If not properly protected, his business and assets in the business could be vulnerable to a lawsuit by others involved in the accident. The liability originates “outside” the business and attacks assets “inside” the business.
It’s not always possible to avoid liability lawsuits and business litigation because they are often beyond your control. However, an asset protection attorney in Ohio can help you decrease your vulnerability to both inside-out and outside-in liability.
Strategies for Asset Protection: Attorneys in Ohio Use Insurance, Corporate Structures and Trusts
Insurance — This is the first line of defense. A proper level of liability insurance will, in most cases, eliminate threats to personal or business assets due to lawsuits. While the cost of insurance can be significant, it is far less damaging than a lawsuit. How much insurance you need depends on your level of risk, the kind of incidents you are most vulnerable to, and other factors. An asset protection attorney in Ohio can help you determine what you need.
Corporate Business Structures — If you have a business or own real estate — especially commercial real estate or rental properties — a corporate business structure goes a long way toward protecting against both outside-in and inside-out liability. I usually recommend a limited liability company (LLC) because it is the simplest structure to use that conveys the protection of a corporation.
Trusts — Trusts are legal entities similar to corporate business structures, but they operate differently and serve a different function. Ownership of assets, including LLC’s and other businesses, can be transferred to trusts to provide an additional layer of protection. Since the individual no longer owns the asset or business interests, they are less vulnerable to lawsuits against the individual. Likewise, lawsuits against the business have a more difficult time touching the individual.
As you can see, setting up an asset protection plan to avoid liability lawsuit and business litigation concerns is a complex matter. Failure to properly structure trusts and corporate entities can lead to fraudulent transfers and/or eliminate all the protective value they have to offer. To ensure your plan is effective and legal, you should seek the help of a qualified asset protection attorney.
In Ohio, Gudorf Law Group, LLC, can assist you in setting up an asset protection plan to avoid liability lawsuit and business litigation concerns. Call our asset protection attorney in Ohio at 1-877-483-6730 to schedule a free consultation.