WHEN ALL ELSE FAILS... PROTECT YOUR ASSETS

To paraphrase a common maxim, things happen. You need to protect yourself against business Armageddon: your company gets hit with a substantial liability that is not covered by insurance, and you are on the hook for it personally.

These kinds of things happen much more frequently than most business people suspect, and the scenarios are widely varied. You signed a personal guaranty to the bank, and it just got called. Your vice president has done some things that make it likely that your company's "corporate veil" will be pierced. You were found personally liable for a tort or statutory violation from which your corporation or limited liability company does not shield you.

Is there a way to protect your personal assets from these kinds of claims?

In the past, many attorneys thought that the best way to protect their clients from creditors was for the clients to place their assets into an offshore trust -- a risky and expensive transaction. However, that may no longer be the preferred choice. Since 1997, Delaware has offered an attractive financial planning alternative, without the costs and risks otherwise associated with offshore trusts. But here's the rub: you cannot wait until the liability is a foreseeable reality to effectuate this kind of planning. If you do, your plans may be invalidated by what the law call a "fraudulent conveyance."

Whether the Delaware alternative fits within your overall estate plan is a question worth asking for many business people. We are actively engaged in this kind of preventive planning for many of our clients, and we are available for consultations on these and related liability-avoidance issues.

Powell, Trachtman, Logan, Carrle & Lombardo, P.C. is a full service law firm with offices in suburban Philadelphia, PA, Harrisburg, PA and Cherry Hill, NJ. Powell Trachtman represents a variety of commercial enterprises, entrepreneurs and business executives in respect to their litigation, litigation avoidance planning, business formation, business transactions, estate and tax planning, and other needs. We are also approved defense counsel for numerous insurance carriers in matters pertaining to professional malpractice, products liability, employment practices, directors and officers liability, and many other fields. For more information, contact us at info@powelltrachtman.com and visit our website at www.powelltrachtman.com.

©Copyright 2003 CCG Properties LLC. All rights reserved, except that recipients hereof are permitted, for noncommercial purposes, to provide copies or excerpts, with full attribution to us, to other interested persons for their personal use. Avoiding Lawsuits is distributed for general informational purposes only. It is not a substitute for personalized legal advice from a competent attorney.