Underrated steps to take before getting sued

September 20, 2024

How to use insurance in your asset protection mix

As an attorney who has seen firsthand the damage that lawsuits can inflict on unprepared individuals, I want to emphasize a critical yet often overlooked step in protecting your assets: obtaining sufficient insurance coverage before a lawsuit ever becomes a reality. You don’t anticipate getting sued, but life is unpredictable. You might find yourself in a car accident, dealing with property damage, or facing accusations from a former business partner. In those moments, your assets—your bank accounts, wages, real estate, and personal items—are at risk if a judgment is made against you.

At the heart of asset protection is not just moving money or creating complex legal structures but taking practical, proactive steps to mitigate risk. One of the most effective ways to do this is through insurance coverage. Many people don’t realize that, in addition to planning for various financial and legal risks, having adequate insurance could be the one thing that saves them from financial devastation.

How Can Insurance Protect You?

For most individuals, two types of insurance are paramount: automobile liability insurance and homeowners insurance. These policies can defend against many lawsuits and help satisfy judgments within the limits of the coverage. But the key here is making sure you have enough coverage—because the bare minimum often isn’t sufficient.

Automobile Liability Insurance

Auto liability insurance protects you in case you’re involved in an accident and are held liable for bodily injury or property damage. I always advise clients not to settle for the state’s minimum required coverage. You might think you’re saving money on premiums, but in the long run, inadequate coverage could cost you dearly. Aim for coverage that reflects the value of your assets. If your assets total $500,000, consider insurance that covers up to that amount to ensure you’re adequately protected in the event of a lawsuit.

It’s also crucial to understand your policy’s limits and exclusions. Policy exclusions—like those for certain drivers or business use—can leave you vulnerable. If you use your car for business or have someone in your household who drives but isn’t covered, you may need to amend your policy.

Homeowners Insurance

Homeowners insurance doesn’t just protect your home from fire, theft, or natural disasters—it also shields you from liability if someone gets injured on your property. From a neighbor slipping on ice to a tree falling on their house, lawsuits can arise from everyday occurrences. The liability portion of your homeowners policy can help cover legal fees and judgments, protecting your personal assets.

Again, understanding exclusions is critical. If you run a business from home, ensure you have either a separate business insurance policy or an endorsement on your homeowners policy to cover potential claims.

Umbrella Liability Insurance: Extra Protection

An umbrella liability policy offers additional coverage beyond your home and auto insurance policies. This is an affordable way to protect yourself from catastrophic judgments that exceed your other insurance limits. For example, if you have a $1 million auto policy and are hit with a $2 million judgment, an umbrella policy could cover the excess.

Before purchasing umbrella insurance, most companies require that you max out your underlying home and auto policies. It’s an additional layer of security that’s often overlooked but can be a lifesaver when large lawsuits come your way.

Additional Types of Coverage

Other types of insurance, such as life insurance and long-term care insurance, play important roles in asset protection. Life insurance ensures your loved ones are taken care of in case of your death, while long-term care insurance protects your assets from being depleted by costly healthcare needs in your later years.

One additional type of coverage that business owners may not have considered is Employment Practices Liability Insurance (EPLI).

EPLI protects business owners from lawsuits brought by employees over issues such as wrongful termination, discrimination, sexual harassment, and other employment-related claims. With the increasing complexity of labor laws and the rise in workplace litigation, even small businesses are vulnerable to costly legal battles with employees or former employees.

For example, if a former employee sues you for discrimination or claims that they were wrongfully terminated, EPLI can cover legal defense costs, settlements, and judgments up to the policy limits. This type of insurance is particularly important for business owners because even a single employment lawsuit can cause significant financial strain on a company, especially if the business doesn’t have large reserves. By adding EPLI to their coverage, business owners can protect themselves from the financial fallout of employment-related legal claims—an often overlooked but crucial aspect of comprehensive asset protection.

The Bottom Line: Asset Protection Is Risk Management

Ultimately, asset protection boils down to managing risk. While no plan is foolproof, being proactive with your insurance coverage can significantly reduce your exposure to potential lawsuits. Consulting with an attorney, accountant, or financial advisor can help you understand the right mix of insurance policies for your specific situation, ensuring that when life throws the unexpected your way, your assets—and peace of mind—remain intact.

Asset protection requires time and investment, but when done right, it’s one of the best investments you can make to safeguard your future. Contact us today to learn more.

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Molding Your Financial Future in 2025

January 17, 2025

As we step into the new year, I find myself reflecting on the countless entrepreneurs, professionals, and business owners I’ve worked with throughout my career. Helping clients mold a shield of protection around their assets has been one of the most rewarding aspects of my practice. Time and time again, I’ve witnessed that success isn’t reserved for geniuses, nor does it require a fancy degree. The secret lies in action, strategy, and discipline—traits anyone can cultivate to achieve and maintain wealth. The Myth of Instant Wealth How often have we heard someone say, “When I win the lottery, I’ll finally be set”? It’s a common refrain, but let’s examine the reality. Imagine winning $10 million in the lottery. After choosing the lump sum option and paying taxes, you might walk away with only a fraction of that—perhaps $2 million. Without a solid financial plan, it’s no surprise that many lottery winners end up broke within a few years. True wealth isn’t about luck or flashy possessions. It’s about what you do with your resources and how you protect them. If you look around your community, the truly wealthy aren’t necessarily the ones with the biggest houses or newest cars. They’re often the ones who’ve taken calculated risks, lived within their means, and built unglamorous but steady businesses. These individuals mold the clay they’re given, creating shields of protection around their assets that ensure their financial stability for generations. The Trap of Looking Rich We’ve all seen it—the big house, luxury car, and designer wardrobe. But appearances can be deceiving. Many who look wealthy are drowning in debt, spending more than they earn, and chasing the illusion of success. As my wife lovingly calls it, Dickersonism #7: “Looking rich does not MAKE you rich.” True wealth is built on a foundation of solid, income-generating assets, not consumables. Falling into the trap of “keeping up with the Joneses” (or Kardashians) often leads to financial instability and missed opportunities to create lasting wealth. The Cost of Inaction One of the greatest obstacles to wealth and protection is inaction. Henry Ford famously said, “If you think you can, you can. If you think you can’t, you can’t. Either way, you’re right.” Inaction is the path of least resistance, but it’s also the path to missed opportunities and unfulfilled potential. Some hesitate out of fear or over-analysis, a condition I call “analysis paralysis.” It’s easy to get caught up in what could go wrong, but this mindset keeps you stagnant. Every successful person I’ve worked with has one thing in common: they took action. They understood the risks but focused on the rewards, moving forward despite uncertainty. Setting Your Course for 2025 If you haven’t taken steps to mold your financial future, now is the time. Ask yourself: Where do you want to be a year from now? In five years? In ten? Define your goals and begin building the path to reach them. Just as importantly, protect what you’ve built. Not having a plan to shield your assets is like running exposed electrical wiring—sooner or later, you’ll face unnecessary risks. A board-certified estate planning attorney can help you design a plan to safeguard your wealth, ensuring it stays secure for you and your loved ones. Take Control of Your Future Success doesn’t just happen—it’s molded. Listen to trusted advisors, but remember that the final decisions are yours to make. Clarify your vision, take bold steps, and build the life you’ve always dreamed of. At The J.M. Dickerson Law Firm, we’re here to guide you every step of the way. Whether in person, by appointment, or via Zoom, we’re committed to helping you create a legacy of success and security. Contact us today, we can help! South Texas: 956-791-5422 Central Texas: 830-302-4577 Let’s make 2025 your year of action, growth, and protection.

Embracing the Holidays as a Time for Estate Planning

December 20, 2024

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Start the New Year Strong: Four Steps to Success

December 13, 2024

As the end of the year approaches, it’s easy to feel the weight of unfinished tasks and the hustle of the holiday season. Between wrapping up work projects, preparing for family gatherings, and making plans for the future, this time of year can feel overwhelming. But amidst the busyness lies a valuable opportunity—the chance to press reset and prepare for a fresh start. The New Year offers a clean slate, making it the perfect time to reflect, reorganize, and refocus your goals. By dedicating some time to the right activities now, you can set yourself up for success in the months ahead. Here are four key steps to help you start the New Year on solid footing. Step 1: Reflect on the Past Year As the calendar flips to a new year, many of us naturally find ourselves looking back at the previous 12 months. This is the perfect moment to assess your professional and personal accomplishments, challenges, and growth. Ask yourself: • What were my biggest successes this year? • What goals did I miss, and why? • What strategies or habits worked well for me? • Where can I improve moving forward? Reflection isn’t just about identifying wins and losses; it’s about understanding the “why” behind them. Seek feedback from colleagues, mentors, or trusted peers to gain new perspectives. The more honest and thorough your evaluation, the more valuable it will be as a foundation for future planning. Step 2: Create a Game Plan for the Year Ahead Reflection is only the beginning. To make real progress, you need a clear and actionable plan for the year ahead. Start by defining your big-picture goal for the next 12 months. What’s the most important outcome you want to achieve? Once you have that, break it down into smaller, measurable objectives. For example, if your goal is to expand your business, your smaller objectives might include increasing marketing efforts, attending networking events, or launching a new service. Outline the steps needed to achieve each objective and set realistic timelines for completion. Revisit your goals regularly—at least quarterly—to ensure you’re staying on track or to adjust for any changes in your circumstances. Flexibility is key to maintaining momentum throughout the year. Step 3: Declutter Your Inbox An overflowing email inbox can be a constant source of low-grade stress. Ending the year with a streamlined and organized inbox can give you a fresh sense of control as you head into January. Here’s how to tackle it: • Respond immediately to any urgent or unresolved messages. • Delete emails that are no longer relevant. • Unsubscribe from newsletters or mailing lists you no longer find useful. • Create folders and filters to better organize incoming messages moving forward. To keep your inbox manageable, schedule regular cleanups throughout the year. Whether monthly or quarterly, these maintenance sessions will prevent clutter from building up again. Step 4: Knock Out Small Tasks The small, unfinished tasks lingering on your to-do list can be more draining than you realize. Use this time to cross off as many as possible before the New Year begins. • File paperwork that’s been piling up. • Respond to emails you’ve been avoiding. • Wrap up loose ends on ongoing projects. Completing these small but nagging tasks will give you a sense of accomplishment and free up your mental bandwidth for bigger goals in the New Year. Starting January with a clean slate will allow you to hit the ground running. Your Fresh Start A new year is a chance to realign your priorities, set meaningful goals, and approach your work with renewed focus. By reflecting on the past year, setting actionable goals, decluttering your space, and tying up loose ends, you’ll create the foundation for a successful year ahead. Whether you spread these steps out over a few weeks or tackle them all in one day, the most important thing is to commit to the process. A little effort now can make a big difference in how you start the year—and how you finish it. Here’s to making the most of your fresh start!