A word of caution is necessary, however. Phrasing can be important. Don't elaborate on the asset protection plan you have in place. General statements usually are better. Simply tell the other party, or his or her lawyer, that you will defend against the lawsuit if necessary, but that you don't have any assets that would be available in any event.
When questioned, simply point out that your only real asset is your home (or your ERISA-qualified retirement plan), which is exempt. Tell the other party that you will vigorously defend against the lawsuit, but it will be a waste of time anyway. If you do not feel comfortable doing this, hire a lawyer. The fees spent will usually be worth the results achieved in this situation.