Benefits of Asset Protection Planning
When an individual is handed a massive judgment in a lawsuit and has a strong asset protection plan in place, the outcome is much different. Consider the most publicized court case in history - O.J. Simpson. He won the criminal case, however lost the civil court ruling. His judgments are in the millions, yet he still manages to live a wealthy lifestyle in Florida.
An solid asset plan can provide many benefits. Here are some true-life client scenarios that put an individual's entire estate at risk in a single moment.
Our client had a neighbor walk through the front yard of one of their houses. The neighbor broke her ankle, suffered a blood clot and died. The owners of the property were sued for far in excess of what their insurance covered. They waited until it was too late and lost nearly all of their worldly possessions, including the their home.
A plastic surgeon stared down the barrel of the lawsuit cannon. Breast implant manufacturers filed bankruptcy as a result of product malfunction lawsuits. So, lawyers pursued the doctors. It was the physician's fault the implants failed, it was the manufacturers'. He faced eight lawsuits at once. He filed bankruptcy, whipping out his personal and professional debts, while still controlling the millions of dollars he earned. His plan saved his wealth.
Another physician client of ours felt strongly that he would win a lawsuit against a former business partner. He was wrong and was surprised by a $1.2 million judgment. He put a strategy in place beforehand to insure his wealth. After creating the strategy and forming the appropriate legal entities, his assets were beyond the reach of the US courts. The licensed, bonded foreign trustee is not required to comply with a US judge's orders. His money remained safely away from his judgment creditor.
Divorce forced a client to face the possibility of losing his home, money and being left with nothing but spousal support payments and mortgage payments on a house in which he did not live in. Asset protection Planners established a protection strategy and put it into place. The funds that would have been seized produced enough investment income to cover the court-ordered payments so that he did not need to dip into his business income.
Another client owned multiple rental properties, leaving huge exposure to a legal opponent. One of his tenants decided to sue and their attorney performed an asset search. The search resulted in only one property being located that had very little equity. Part of the plan was to create a Nevada LLC that had a 2nd mortgage on the discovered property. The attorney suggested that the case not be pursued. All the while our client had over 20 properties and a considerable estate, however the protection plan kept his wealth out of view of the opponents legal team looking for assets to take.