I wouldn't entirely count this out as a valid shelter. There are plenty of people (both crooks and non-crooks) that appeared to use corps as asset shelters. The question is, minus the trival costs of setting up a corp for this purpose, and managing the day to day operation, I'm actually curious to hear how someone would use this to protect assets. I'm sure it's can be done, just very few people know or are willing to talk about it.
I really wish we had an blogger here that's an estate lawyer that could talk about liability shelters. It's a valid concern, especially living in a sue happy state.
My perspective though.
In most cases, if you're only concern is about getting sued because you have assets (say if you get into an accident, or someone slips and falls on your porch), getting a nice liability insurance on both home and auto AND adding an umbrella coverage would be a good start. Total coverage of $1million of liability would be a start.As insurance companies are cheap and will resist payouts, they will fight to defend against frivolous lawsuits. Particularly in a sue happy state CA, this is useful if you get into a fenderbender, even if it wasn't your fault..some idiot will always try to make money off of it. Second rule is to keep a nice camera in the car so when the accident happens, snap a nice picture before moving any vehicles (I have a nice webcam that also films when, just in case those nice people who drive big SUVs should happen to leave me nice door dings in the shopping malls and accidentally forget to leave a note)
It also helps to put things in other people's names and the account types matter. In some states, retirement accounts aren't subject to creditors. In CA, i'm not so sure (But I'm not a lawyer, and can't speak with certainty).
There's also things with irrevocable trust accounts and foundations which I haven't investiagated. I wish someone here could speak to that. NOTE: Living Trusts don't necessarily add any asset protection according to lawyers that I spoke with. They only facilitate distribution of wealth at death by avoiding to go to probate and offer some increased exemptions from estate taxes for married couples.
One thing about 529 education savings account. I did read that the 529K education plan accounts weren't considered a protected account in CA. Other states treat this similar to a retirement account and creditors can't go after it.
