can I do an irrevocable trust to protect my assets from personal liability?
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can I do an irrevocable trust to protect my assets from personal liability?
hello,
I have been in a car accident in Florida, I am at fault.The other party made a
claim to have her car repair, that is done. However her lawyer sent a letter to
my insurance company saying that they are representing the person who was
driving and she was injured in the accident, also requesting additional
information on my policy.
‘The layer has not yet send the formal demand to my insurance company’.
Question Can I, at this point, do an irrevocable trust to protect my assets
from this demand that is coming in the near future. I do own several rental
properties that are under single member LLCs and one rental property that is
under my name and my husband.
Kind regards,
Ms Damiano
Asked on July 5, 2016 under Accident Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
No, you can't safely do an irrevocable trust at this point: courts have the power to set aside transactions which were clearly done to defraud creditors or hide assets from them, including potential judgment creditors. Since you are already aware you may be sued, if the other side pursues the money in the trust, most reasonable costs would correctly see what you did as an attempt to defraud the other side and let them get at the assets in the trust. For a trust to protect you, it really should be done *before* you know or have reason to think you will owe money.
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