Part One

Get an umbrella insurance policy

Recently, a retiree went to an asset protection specialist after his wife was involved in an automobile accident. The retiree had a net worth of $4 million, but his wife was being sued for $10 million. The attorney was astonished to find that the couple carried only $100,000 in auto liability coverage, and had no umbrella insurance policy.

The most important point of asset protection is to get an umbrella, one that will unfurl when the limits on your homeowner's and auto liability insurance policies are exhausted. It costs under $200 a year to purchase a $1 million umbrella policy. A good umbrella policy should also cover you for miscellaneous events, such as having an accident on a rented motorbike, or liability if you do volunteer work. However, the list of "exclusions," (i.e, items that aren’t covered) in most policies has grown over the past 15 years. Since exclusion lists vary, your best bet is to shop around based on your own risks. For instance: Most umbrellas exclude long-term pollution damage, but some will still cover damage from a sudden catastrophe, such as your in-ground heating oil storage tank springing a leak.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.