When developing an asset protection plan, you’ll often hear about inside liability and outside liability. They are different and it’s important to plan for both scenarios.
Inside Liability vs. Outside Liability
Inside liability refers to claims that emerge from within an asset or business entity. For example, if you have a rental property held in an LLC and somebody is hurt on the property, that liability occurs inside of the LLC. Or in other words, the creditor claim is limited to what is inside of the LLC. The creditor could not go after the business owner’s personal assets. (Another example would be if a client or customer were somehow “injured” and sues you.) [Read more…] about Asset Protection Definitions: Inside & Outside Liability