PROTECTING YOUR ASSETS:
Insurance Can be Your Best Bet:
The best way to protect your assets against you being sued for causing harm by carelessness is to buy insurance policies. In Nevada, state law only requires you to have a small amount of liability insurance on your vehicle which protects you if you are sued if you carelessly hurt someone while driving. I advise paying extra to buy enough insurance so that your liability limit is large compared to your assets.
(Most attorneys who might sue you on the basis that you carelessly injured their client will advise their client to accept an insurance settlement rather than insisting on going after your personal assets as long as the insurance limit of coverage is large compared to your assets.)
If you own a home, your home owner's insurance may cover you for many negligent acts, for example, for injuring another skier if the injury was caused by your carelessness. You can also buy an "umbrella policy" that will extent the liability coverage on your autos and protect you in situations such as the ski accident.
If you run a business, I recommend a business insurance policy. These need not be expensive, depending on the type of business.
If you practice a profession such as accounting, law or medicine, you should have professional liability insurance.
However, insurance does not cover intentional bad acts. If a surgeon carelessly does the wrong operation on you, his or her malpractice insurance will cover the claim. If a surgeon sexually assaults you the malpractice insurance company is off the hook. This is why if two people get into an argument and one person falls down and cracks his skull, the victim's attorney may argue that the knock-down resulted from negligence rather than an intentional push.
What About Trusts and Corporations?
It is a common misconception that it is easy and legal to simply put your assets in a trust and be protected from creditors. It is helpful to consider these 4 concepts:
1) If you want to give away to a friend or relative money that you could probably keep and you want that money to be protected from potential creditors of the friend or relative, we can probably make that work. The device used is a spendthrift trust. If it is clearly your money that you want to give away and you want to give it to a particular person and not to that person's present or future creditors, the courts generally are okay with that. (IWe have used the word "probably" and "generally" in this paragraph because we would need to discuss details with you before we could be more definite.)
2) If it looks like creditors are going to get your money or property, then it is probably not going to work to try and give it away to friends and relatives, especially close relatives. Your creditors will probably be able to attack the transfer.
3) There are some ways you can plan in advance to protect your own money and property from future creditors, but many judges dislike people trying to do this and find ways to side with the creditors.
4) However, courts and state legislatures understand that business activity drives the economy and offer limited liability to individuals conducting business activities.
Here are ways to potentially protect yourself against future creditors:
1) Set up a corporation. The basic idea behind a corporation is that you are liable for your own carelessness or intentional wrongs but not the carelessness or wrongs of other shareholders or employees of the corporation. For example, you set up a landscaping service as a corporation. Naturally, as your business grows you hire a bunch of people who drive to various places to mow lawns. You tell your drivers to be careful and you are careful never to pressure them or give them incentives to speed. One day one of your drivers carelessly runs through a red light and kills someone. In theory only the corporation and the driver are liable, not you, even though you own 100% of the corporation. But let's say you pay yourself every time the corporation receives a fee. Let's say your drivers provide their own vehicles and tools. This way there is nothing in the corporation for accident victims to go after. In this extreme case most courts will say the corporation should not protect your assets. (To be expanded soon.)