Asset Protection Planning
is proactive legal action that protects your assets from threats such as creditors, divorce, lawsuits and judgments. Call now to let our attorneys help you.
How to avoid lawsuits. An asset protection strategy can help deter a lawsuit before it starts. Before a legal opponent pursues a party there will be some due diligence on the plaintiff’s side. This is a phase where your legal opponent will look to see if you are a “deep pocket” case. There is a cost benefit analysis for their own legal initiative. Even if a case is won after an expensive (for both sides) legal storm, what will the result be? If you are found to be an person with assets that they can use to satisfy a judgement, it creates a potentially positive outcome for the pursing party.
Consider a large corporation such as McDonald’s fast foods. For instance, a customer spills hot coffee on themselves at the drive through and is awarded millions of dollars in a settlement. Would this have happened at the locally owned donut shop? Probably not. Thus, here we explore the concept of discovering if an entity or person as a worthy target. In the example above, nobody has to perform an investigation to know that McDonald’s has deep pockets. So, a contingent legal team was successful in achieving millions of dollars in settlement money for a beverage spill. Now the concept that applies to the rest of us is fundamentally the same. However, somebody will have to perform some records checks to see if your pockets are deep enough to make it worthwhile to pursue you.
By performing a public records check, one can quickly discover recorded property documents. They can find real estate that you own and look at recorded mortgages. This is a simple check to see your home or other properties. They can look online at online appraisal services such as Zillow. With this, they can estimate the value and cross reference that with your mortgage. With this, they will estimate equity. This is just one example of how they can assess one of your most valuable assets, your home, and to check whether or not you have the capability of satisfying a legal obligation. Private investigators can find bank accounts, corporate shares and other forms of assets almost as easily. In fact, there are professionals that make their livings investigating assets for law firms.
Privacy is a powerful tool for asset protection. If an investigating party cannot find any assets tied to your name and it appears that you do not have any, you make a weak case for a legal strike. Contingent legal teams are not inclined to pursue an entity or individual with little or no assets to use in a settlement. This is a deterring factor that can start to slow down a legal opponent. Your first layer of defense to detour a legal strike could be a matter of privacy. If your opponent knows you have assets, however cannot find them with simple searches and still pursues you, then your next layer of protection kicks in. You have assets, however they are defended well which would make them very difficult or impossible to obtain – your legal structures and plan at work.
Here are some examples. First, we establish land trust to give real estate owners privacy. The trust holds the title in the public records. But the trust is not open to public viewing. So, the owner is a mystery to prying eyes. Next, we establish title holding trust that hold titles to automobiles. When a contingent fee attorney, or his private investigator does a public records search, your assets are generally hard to find. If a lawsuit penetrates your fences, the next step is actual asset protection.
Privacy is not enough. A lawsuit might pierce your privacy shield and hit you between the eyes. If it does, you need an asset protection strategy. So what is the solution? We put rental properties into land trusts. Then we set up LLCs to own (hold the beneficial interest in) the trusts. Cash goes into a separate LLC in the US or (preferably) offshore. The entire portfolio goes into an asset protection trust.
How does this avoid lawsuits? Your opponent will see that if they win and get a judgment against you they get nothing. So, we see many lawsuit dropped before the finish. Even if they do go the whole route, with your assets securely tucked away in the proper legal tools, you can weather the storm with your wealth in-tact. Judgment creditors will go empty handed.
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The biggest reward an asset protection strategy can afford you is a lawsuit that didn’t happen. Lawsuits are expensive, whether you win or lose and if you can avoid one, you save huge sums of money on legal fees before your assets are even at risk. Being able to ward off a lawsuit is security. To set up a plan to avoid lawsuits and enjoy that security, use the number or contact form on this page.