Lawsuit & Litigation Protection
You Have Been Sued. Your Assets Are Now Exposed.
Over the past 25 years we have represented hundreds of clients who were in litigation, already had a judgment entered against them, or knew a lawsuit was on the way. In every case, there is always something you can do to improve your position.
Here Is What Happens Next
If you are reading this page, someone has filed a lawsuit against you, or you believe one is coming. The attorneys are circling and you are wondering what happens to everything you have spent your life building.
Here is what most people do not understand: the moment a lawsuit is contemplated — well before it is filed — your assets become visible. Opposing counsel will run asset searches. They will find your real estate and business interests easily. If they are motivated enough, they will also find your bank accounts, brokerage accounts, and other assets. Everything you own becomes a target and becomes leverage for the other side to push you into a settlement you cannot afford.
The question is not whether you should protect your assets. The question is whether you still can. In most cases, the answer is yes. But the window is narrower than you think, and it gets narrower every week.
3,000+
Clients Represented
25 Years
Asset Protection Experience
~30%
Of Plaintiffs Walk Away Entirely
What You Stand to Lose
A judgment against you is not just a piece of paper. It is a tool that allows a creditor to levy your bank accounts, place liens on your real estate, and garnish your income. In California, a judgment lien attaches to all real property you own in the county — automatically.
If the judgment is large enough, opposing counsel may seek to examine you under oath, compelling you to disclose every asset you own anywhere in the world. That process is called a judgment debtor examination and it is as uncomfortable as it sounds.
One of the most persistent misconceptions we encounter is the belief that a revocable living trust provides asset protection. It does not — not even a little. A revocable trust offers zero protection from creditors because you retain full control over the assets. Another common mistake is assuming that a single-member LLC or a basic insurance policy will absorb a large verdict. Often, it will not.
Common Misconceptions
✕ “My revocable trust protects my assets.”
→ It provides zero asset protection.
✕ “My single-member LLC protects me.”
→ In many states, very little protection.
✕ “My insurance will cover everything.”
→ Claims often exceed policy limits.
Two Clients. Two Very Different Outcomes.
Without Protection
The Physician: A Malpractice Verdict He Was Not Prepared For
A California physician came to us after a malpractice verdict significantly exceeded his insurance policy limits. He had a revocable trust, a single-member LLC, and assumed he was protected. He was not.
His real property had equity. His brokerage accounts were in his own name. His insurance company paid its limit and walked away, leaving him personally exposed to the remainder. The plaintiff’s attorneys moved quickly.
Because no protective structure was in place before the claim arose, options were severely limited. The transfers that could have been made years earlier were now unavailable without creating fraudulent conveyance liability.
Outcome: He lost his home. His retirement savings were decimated.
With Protection
The Developer: Sued for $12 Million, Protected Where It Counted
A real estate developer retained us after a business dispute escalated into a $12 million lawsuit. Fortunately, he had engaged us two years earlier, before any litigation was contemplated, to restructure his holdings.
His real estate portfolio was held through a layered structure involving limited partnerships and a Nevada asset protection trust. His personal bank accounts held minimal balances. His equity had been legitimately encumbered.
When opposing counsel ran asset searches, what they found was a complicated, expensive collection problem. The economics of the lawsuit shifted in our client’s favor before a single motion was filed.
Outcome: The case settled for a fraction of the original demand.
We have represented 3,000 clients facing lawsuits. Learn what’s still possible.
Or call 818-933-3838
The Structures We Use
Asset protection is not a single product. It is a combination of legal structures tailored to your specific situation. We consider timing, your specific assets, and how aggressive the creditor is likely to be.
A Domestic Asset Protection Trust (DAPT) is an irrevocable trust established in a state with favorable asset protection laws, such as Nevada or South Dakota. Once funded, the assets inside the trust are generally beyond the reach of future creditors — including plaintiffs who sue you after the trust is created. The settlor can be a discretionary beneficiary, meaning you may still benefit from the assets while they remain protected. Timing matters significantly; transfers made after a lawsuit is filed or imminent may be challenged as fraudulent conveyances.
Equity stripping involves encumbering your assets — typically real estate — with legitimate liens so that the net equity available to a creditor is reduced or eliminated. A creditor can only seize what you own free and clear. If a property has a senior mortgage or line of credit securing a real obligation, there is little incentive for a plaintiff to pursue it. Done correctly, equity stripping is a lawful and often highly effective tool, particularly for real property that would otherwise be a conspicuous target.
A Trigger Trust is an irrevocable trust structure that becomes active — or “triggers” — only upon the occurrence of a specified event, such as a lawsuit being filed. Prior to the trigger event, the trust may hold assets in a more accessible way. Once the trigger fires, the trust becomes an asset protection vehicle. This structure is designed to provide flexibility in normal times while offering a layer of protection when it matters most. As with all planning, proper legal execution and timing are critical.
Properly structured LLCs and Limited Partnerships can separate your personal assets from business liabilities and, conversely, can protect business assets from your personal creditors. Charging order protection — available in most states — limits a creditor’s remedy against your LLC interest to a charging order rather than allowing them to seize the underlying assets or assume control. The strength of this protection varies significantly by state. California, for example, offers weaker charging order protection than Nevada or Wyoming.
In community property states like California, transmutation agreements allow spouses to reclassify assets from community property to one spouse’s separate property — or vice versa. A creditor of one spouse generally cannot reach the separate property of the non-debtor spouse. When executed before a lawsuit is anticipated, transmutation can be an effective planning tool. These agreements must be in writing and comply with state law formalities to be enforceable.
Offshore asset protection trusts — established in jurisdictions such as the Cook Islands, Nevis, or Belize — are among the strongest asset protection vehicles available. Foreign trustees in these jurisdictions are not bound by U.S. court orders. A U.S. plaintiff who obtains a judgment must relitigate in the foreign jurisdiction under its laws, which are deliberately designed to favor the trust settlor. Offshore planning involves compliance with IRS reporting requirements, including FBAR and Form 3520. We handle all of this as part of the engagement.
What Asset Protection Cannot Do
Asset protection cannot make a legitimate debt disappear, undo a judgment already entered, or protect assets already frozen. Transfers made to defraud creditors can be reversed.
The goal of asset protection is not to make debts disappear — it is to change the economics of a lawsuit so that collection becomes difficult, expensive, and uncertain. That changes outcomes.
Timing Is Everything
The single most important factor in lawsuit asset protection is when you act. The law draws a sharp line between planning that occurs before a claim arises — which is generally permissible — and transfers made after a creditor exists, which may be unwound as fraudulent conveyances.
A “creditor” in the legal sense exists earlier than most people think. If a professional has received a notice of intent to sue, if a business dispute has escalated to the point where litigation is probable, or if a regulatory investigation is underway, that creditor relationship may already exist — even without a filed complaint.
Even after a lawsuit is filed, however, there are often options. The goal shifts from prevention to damage control — and our experience with hundreds of litigating clients gives us a clear view of what remains legally available to you.
Mistakes We See Every Week
Waiting until a judgment is entered
Transferring assets to a spouse or family member without proper legal structure
Assuming insurance will cover everything
Relying on a revocable trust or basic LLC
Doing nothing and hoping the lawsuit goes away
Learn More
How Domestic Asset Protection Trusts Work
The most common structure for protecting personal assets from future creditors.
How Trigger Trusts Work
A discretionary trust that activates only when a threat materializes.
How Equity Stripping Works
Reduce the visible equity in your assets so they become unattractive to pursue.
How Transmutation Agreements Work
Convert community property into separate property to limit spousal liability exposure.
Take the First Step
We offer a free, confidential consultation. No obligation, no pressure.
This is attorney advertising. The information provided is for general informational purposes only and does not constitute legal advice. Contacting Aliant LLP does not create an attorney-client relationship. Past results do not guarantee future outcomes. Every case is different and must be evaluated on its own facts.