| People are very concerned about asset protection, because in the United States, over 70,000 lawsuits are filed each and every day. Many of them are considered frivolous lawsuits. In other words, they are lawsuits that don’t really have any merit. They’re like legal forms of extortion. There are many legitimate lawsuits, as well. The average medical malpractice award is almost $4 million. The cost of settling a suit is very expensive, around $90,000 plus the actual settlement amount. For businesses and employers, there are many sexual harassment lawsuits, and the average verdict of a sexual harassment case is about half a million dollars. Thusly, people are scared and very interested in asset protection. The term “Asset Protection” means different things depending on the specific situation. For a very elderly couple, for example, asset protection might mean avoiding the high cost of a nursing home. For business owners, asset protection means protecting yourself against business liability and employee problems. Professionals like doctors, lawyers, and architects have very different ideas of asset protection. Basically, the definition of asset protection is essentially risk-management planning. The first goal of an asset protection plan is to discourage any potential lawsuits, especially those frivolous ones. The second goal is that if a lawsuit cannot be avoided, then at least a favorable settlement can be achieved if you have a good asset protection plan. Asset Protection planning revolves around building a plausible story that you can tell to a judge or a jury that results in the preservation of your assets. Of course, each case has its own unique situation and must be analyzed, designed, and implemented on a case-by-case basis. One size really does not fit all! What Are Some Factors to Consider When Starting the Asset Planning Process?As a certified specialist in estate planning, I believe that Asset protection really should be a component of every estate plan. This is the only way that it will work. Therefore, when an individual or family is considering putting together their estate plan, they must look at asset protection. It’s not something that you can do at the last minute, which is why it must be part of your existing estate plan. For example, if you have ever gone scuba diving, you know that the number one rule is to always go with a buddy. You never scuba dive alone! So if a big, great white shark shows up out of nowhere, you immediately draw your knife, stab your buddy, and then you turn around and swim in the opposite direction as fast as you possibly can! Now that’s asset protection planning! The point is that there are now a million lawyers in the United States, and many of them are out swimming in those waters, looking for easy prey. They are looking for that swimmer who is bleeding in the water – namely a person or a company who hasn’t done any asset protection. Don’t be one of them! If you have an asset protection plan, hopefully they will be discouraged from even starting a lawsuit against you. They might do a little bit of investigating and find out that you have an irrevocable trust or an ERISA qualified retirement plan. Hopefully, they’re just going to say, “It’s going to be very difficult for us to get any money out of these people, so we’ll move on to the next one.” Certainly, if you have a business, you should do asset protection. If you’re selling or buying a business, that’s a very dangerous timeframe. Doctors, lawyers, CPAs, architects, engineers, and many professionals have a lot of exposure to liability for malpractice. They should have asset protection plans as part of their estate planning. If you’re an officer or a director of a corporation or a non-profit entity, you’re exposed a little bit more. If you’ve made any personal guarantees, you should have an asset protection plan. If you engage in dangerous activities, like scuba diving, boating, or flying an airplane and if you own an airplane or race cars, you need asset protection. Real estate developers, investors, and landlords who own multiple apartment units should engage in basic asset protection, as well. People who own factories or raw land that’s been contaminated somehow should have asset protection. If you’re expecting an inheritance in the future, this is a good time to put together an asset protection plan, as well. For more information on Asset Protection Process, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (949) 660-0007 today. |