IMPORTANT: Please note that we are not qualified to provide tax, legal or investment advice. This information is intended as general guidance only. You should always consult with an experienced asset protection attorney regarding your personal situation.
Having "401k" in the name would not necessarily create extra liability. There is no liability for you without some kind of liability event. If there was an event for which your 401k was liable, the liability would exist regardless of having the "401k" in the name.
There are two possible liabilities that you need to be aware of:
- If there is personal liability against you as an individual, your 401k assets would be protected under federal law. Judgement against you personally or creditors who are after you would not be able to touch your 401k assets.
- A second possible liability could arise as a result of owning asset in your 401k, such as rental property.
Again, not having a 401k as part of the name does not reduce your liability. The 401k trust in itself is not a vehicle designed to provide liability protection.
If liability is a concern for you, I would recommend the following:
- Make sure you have an adequate amount of liability insurance
- In addition to liability insurance, you can obtain umbrella liability insurance coverage. This comes in increments of $1MM.
- Assets can be isolated into separate LLCs
You can also utilize a land trust to achieve the anonymity.