Protect What You Keep: Insurance, Trusts, and Walls Around Your Money

Once people know you have money, you become a target: for lawsuits, for bad deals, for relatives with big ideas. You cannot stop all of that. What you can do is build walls, so that one bad day does not take everything. None of this is exotic. It is the same playbook careful families have used for generations. This is general education, not legal, tax, or insurance advice. Hire licensed pros for your actual plan.

Wall 1: Insurance

• Umbrella liability insurance. It sits on top of your auto and homeowners coverage and pays when a claim is bigger than those limits. If someone sues you for $3 million after a car accident and your auto policy covers $500,000, the umbrella covers the rest up to its limit. For a public figure with money, a policy of several million dollars is often cheap next to the risk. Your insurer will usually require high limits on your underlying auto and home policies first.
• Disability insurance. Your body is your business. A career-ending injury stops the checks. Pro contracts and league benefits cover some of this, but often not enough, and not for everything.
• College players: the NCAA's disability program. The NCAA has long offered the Exceptional Student-Athlete Disability Insurance (ESDI) program, which lets top pro prospects buy permanent total disability coverage while still in school, and in 2023 it added a post-eligibility insurance program schools can use for athletically related injuries after a player's college career. Ask your compliance office for the current terms.
• Loss-of-value insurance. Sold privately, it pays if an injury drops your draft position and your first contract comes in well below a set amount. It is expensive and the fine print decides everything, so have someone independent read it before you buy.
• Life insurance. If people depend on your income (kids, a spouse, a parent), term life is the simple, affordable answer. Be careful with anyone pushing complicated permanent policies as an "investment" when you are 22; they often pay the seller more than they pay you.

Wall 2: Retirement accounts

Retirement money gets some of the strongest legal protection there is. Employer plans covered by ERISA, like most 401(k)s and many league plans, have an anti-alienation rule, and in Patterson v. Shumate (1992) the U.S. Supreme Court held that money in those plans is kept out of your bankruptcy estate. IRAs and Roth IRAs are protected in bankruptcy up to a cap that adjusts every three years: $1,711,975 from April 1, 2025, through March 31, 2028. Money rolled over from a 401(k) into an IRA does not count against that cap. Outside bankruptcy, IRA protection depends on your state.

Wall 3: Your home

Every state protects some of your home's value from most creditors through a homestead exemption. A few go much further. Florida protects a primary home with no dollar limit if it sits on no more than half an acre inside a city or 160 acres outside one. Texas also has no dollar limit: up to 10 acres in a city, and up to 200 acres in the country for a family (100 for a single adult). Most other states cap the protection at a set dollar amount. These exemptions do not stop a mortgage lender, property tax bills, or certain other debts, and moving right before a lawsuit to use them can backfire.

Wall 4: The right trust for the right job

• Revocable living trust: great for avoiding probate, which keeps your affairs private and speeds things up for your family. But because you can change it and take the money back anytime, it gives no protection from your creditors. The law treats the assets as yours.
• Irrevocable trust: you give up control, and in return the assets can be protected and can pass outside your estate. Useful for things like life insurance or money set aside for kids.
• Domestic asset protection trust (DAPT): a special irrevocable trust where you can still be a beneficiary. About 20 states allow them, including Nevada, South Dakota, Delaware, and Alaska. They are complex and cost real money to set up and run.

Wall 5: LLCs for businesses and property

A limited liability company can wall off a business or a rental house, so that if someone gets hurt at the property, the claim generally stays inside that LLC instead of reaching your other assets. It only works if you run it like a real company: separate bank account, proper insurance, no paying personal bills from it. An LLC does not help with your team salary. You earn that as an employee, and running it through an LLC does not change who owes the taxes or who can be sued.

The house for Mom

If you are buying your mother a house, the deed decides who controls it and who can reach it. Put it in her name and it becomes exposed to her debts, a new spouse, or her will. Keeping it in your name, your LLC, or a trust that lets her live there for life keeps it inside your walls. We walk through every option in Buying Mom a House: Give It or Keep It? at /guides/buying-mom-a-house.

Wall 6: The family papers

• Will: says who gets what and, if you have minor kids, who you want to raise them (a guardian).
• Financial power of attorney: a person you trust to handle money if you are injured and cannot.
• Health care directive and health care proxy: your medical wishes and who speaks for you.
• Beneficiary forms: retirement plans and life insurance go to whoever is named on the form, not whoever is in your will. Check them after every big life change.
• Guardians and trusts for kids: a minor cannot inherit money directly in a useful way. A trust with a responsible trustee keeps it from landing in an 18-year-old's lap.

Scams that target athletes

• Guaranteed high returns. Real investments go up and down. "Guaranteed" plus "high" is the calling card of fraud.
• Private placements. Shares in a private company or fund you cannot easily sell, with limited information and no public price. Some are legitimate. Many sold to athletes are not.
• Loans to friends' businesses. The restaurant, the clothing line, the record label. Treat it as a gift you may never see again, or say no.
• Anyone who wants control of your accounts. An advisor should never need your passwords or power to move money out. Your money should sit at a big independent custodian in your own name.
• Someone who looks like you, talks like you, and knows your people. Regulators call this affinity fraud, and it works because trust skips the homework.

Your first 10 protections

1. 1
   Raise your auto and home liability limits

   Then add an umbrella policy on top. Ask for several million in coverage.

2. 2
   Get the right disability coverage

   College prospects: ask compliance about the NCAA programs. Pros: see what your league covers and fill the gap.

3. 3
   Buy term life if anyone depends on you

   Simple term, sized to replace your support for the people who need it.

4. 4
   Max your retirement plan

   League or employer plan first, then IRAs. It saves tax and it is protected.

5. 5
   Sign a will, powers of attorney, and a health directive

   Name guardians for minor kids. This costs far less than the mess without it.

6. 6
   Check every beneficiary form

   Retirement accounts and life insurance. Make sure they match your plan today.

7. 7
   Set up a revocable living trust

   For probate avoidance and privacy, knowing it is not a creditor shield.

8. 8
   Put businesses and rentals in LLCs

   One property or venture per LLC, each with its own account and insurance.

9. 9
   Talk to an asset protection lawyer while things are calm

   Ask whether an irrevocable trust or DAPT fits you, before any claim exists.

10. 10
    Keep control of your own accounts

    Accounts in your name at a large custodian, with statements coming to you. Nobody else gets passwords.