Asset Protection Plan
If you are like most of us who have worked hard to be comfortable and build some net worth, you should be concerned with deterring and preventing it from being taken away, asset protection planning. The threat is a real-world concern - being engaged by a legal opponent that can easily take advantage of any opportunity to separate you from your assets.
Medical practitioners and physicians are all too aware of the nightmares involved with malpractice suits where judgments can quickly go beyond insurance coverage.
Asset protection planning allows you to utilize lawful techniques that will not allow anyone to take your assets. There are limits to what can be done and when.
When creating an asset protection plan, it is important to consider how much exposure you have to liability risk, what kind of assets you posses and your overall net worth when you develop an asset protection strategy.
Insurance is the first line of defense towards protecting yourself. You, ultimately, hand off your risk to the insuring company, easily done, and sometimes, required by law. There are too many cases where insurance coverage limits didn't cover the risk that was faced or the total value of a liability. Insurance companies are also tasked with finding a loophole to deny your claim. Insurance is calculated risk coverage in the event of a predictable and quantifiable incident. An asset plan protects your assets at the source - your wealth.
Lawsuit Avoidance
Even if you are involved in a lawsuit and win, you are still out your own legal expenses, so there is still a loss. The US doesn't have a "loser pays" legal system. In other developed countries, the plaintiff is forced to pay both sides' legal fees, which is a huge deterrent for frivolous lawsuits. In some cases, here in the US, attorney firms make a living litigating and never seeing the inside of a courtroom. Preventing a lawsuit is more important that winning a lawsuit. Asset protection planning is a key measure that can prevent you from being a target.
In today's world the average person is subjected to several lawsuits in his/her lifetime, one of which could be a "killer lawsuit". The United States has 5% of the global population, yet 70% of the world's lawyers, a person can be faced with losing everything at any moment.
Lawyers for plaintiffs only prosecute cases they believe will pay off. Attorneys will, generally, perform an asset search, in order to find out what they can potentially be awarded in a judgment, your home, cars, real estate, stocks, bank accounts, etc. When your assets are in your name its very easy to "see what you're worth". If a legal enemy performed an asset search, didn't find any valuable assets, then there isn't a pot of gold at the end of the lawsuit. Your chances of being pursued drop substantially. Even in the event that your assets are known, a solid protection plan can convince your legal opponent that your assets are truly beyond the lawyer's reach.