It was a beautiful spring day…just perfect for Tom and Sarah Smith’s “deck party”. They were excited to welcome their friends and show off their newly installed deck. Soon, everyone began arriving, marveling over the deck’s construction and how beautifully the new addition complimented Tom and Sarah’s home. The festivities were in full swing when, suddenly, a man’s voice cried out. It was Tom’s colleague, Jerry, who had fallen down the steps. Writhing in pain, his ankle began swelling and turning black and blue. Sarah called an ambulance and, soon after, it was learned that the fall had broken Jerry‘s ankle.

Luckily, Jerry didn’t sue Tom and Sarah, but the unhappy incident triggered a visit their attorney’s office for advice.

They discovered they needed 4 specific legal documents:

  • Homeowner’s insurance
  • Umbrella policy
  • LLC, because of Tom’s growing business
  • Asset protection trust

Let’s look at each in greater detail.

Homeowner’s Insurance

Homeowner’s insurance covers the structure of the home where you live, as well as most possessions (clothing, furniture, electronics, etc.) It can also cover items in your possession while not at home – for example, an item stored in your car’s trunk. A homeowner’s insurance policy also provides liability coverage – like Tom and Sarah, if someone is injured while on your property, you will be covered, to varying degrees, depending on your policy.  Finally, it covers any additional cost of living expenses you may incur if your home becomes uninhabitable, for example, following a fire.

Umbrella Policy

The so-called Umbrella Policy provides additional liability coverage above and beyond limits of your homeowner’s insurance…filling in the gaps, so to speak, where basic liability coverage simply isn’t adequate.


Missouri allows for the formation of several varying business structures, one of which is the Limited Liability Corporation, or LLC. Compared to an “Inc.” corporation, the LLC is generally easier to create, with less costly fees, and less complex ongoing administration. A primary benefit of the LLC to homeowners like Tom and Sarah, concerned about a potential lawsuit, is protection from personal liability. In the event of debt incurred or a lawsuit, this means that a claimant or creditor must seek relief through the LLC, and not against Tom or Sarah personally. Their personal assets are protected, and the business bears the burden of liability.

Asset Protection Trust

A Missouri Asset Protection Trust (“APT”) is an essential and irrevocable legal document protecting people from claims against them made by “future unknown” creditors.  In other words, if Jerry should make a claim against Tom at some later point – say, he develops back trouble and claims his broken ankle as the source – Tom would not have to fear losing all of his assets due to Jerry’s claim.

While an APT can’t protect a person from the claims of current creditors, or be used for hiding wealth and assets, it can place assets out of reach to future creditors so that certain interests and powers can be maintained. In Missouri, specific limitations exist, including a 4-year window within which creditors can challenge trust transfers as fraudulent. Alimony and child support are exempt from creditor protection, for obvious reasons.

If someone makes a claim against you in Missouri, are you prepared? If not, please contact Brian Quinn for a private, no-obligation consultation.