According to a recent survey, over 80% of Americans believe there are too many lawsuits in the USA. Another survey found that 67% of homeowners were concerned that they might personally be sued and held liable for money damages. But don’t run and hide just yet. Although the majority of people fear being involved in a lawsuit, in reality, most of us are unlikely to face a lawsuit resulting in personal liability (no guarantees!). But in case we do, there are a number of protections in place to help people.
In fact, for those living in Ohio, there is new law that will significantly change the landscape of asset protection here in Ohio. The law, known as the Ohio Asset Management Modernization Act (or OAMMA for a non-mouthful), will take effect as of March 27, 2013 and will protect Ohio residents from the proverbial rug being yanked from beneath them. Amongst the changes it brings is the increase in protection of up to $125,000 in interest in any parcel or item of real or personal property used as a residence. This is an increase from the $21,625 protection the law used to provide. Additionally, the law enacts the domestic asset protection trust statute which protects some assets transferred to a legacy trust.
Another way to protect yourself from personal liability is to purchase a personal umbrella-liability insurance policy. An umbrella insurance policy can protect assets and future income in addition to any primary policies the insured may have. Obviously each policy is unique, but a typical policy will provide $1 million of coverage and cost in the range of $200 to $400 a year. This article should not act as an advisory, but this would be a very minimal investment to assuage your fears and potentially protect you from immense liability.
Although I wouldn’t take a laissez faire attitude when it comes to liability, with the right protections in place, I would feel a lot safer.