How asset protection planning helps detour 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. This 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 entity with assets that can be used to satisfy a judgement, it creates a potential outcome for the pursing party.
Consider a large corporation such as McDonald’s fast foods. A customer spills hot coffee on themselves at the drive thru and is awarded millions of dollars in a settlement. Would this have happened at the local donut shop, probably not. Here we explore the concept of discovering if an entity or person is a worthy target. In the example above, nobody has to perform an investigation to know that McDonald’s has deep pockets and 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 is is fundamentally the same, however somebody will have to perform some records checks to see if your pockets are deep enough to make it worth while to pursue you.
Finding Your Assets
By performing a public records check, one can quickly discover recorded property documents, finding real estate that you own and look at recorded mortgages. This is a simple check to see your home or other properties, where you can estimate the value and cross reference that with your mortgage where you can estimate equity. This is just one example of how one of your most valuable assets, your home, can be used to check whether or not you have the capability of satisfying a legal obligation. Bank accounts, corporate shares and other forms of assets can be found just as easy. In extreme cases, there are professionals that make their living 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 incline to pursue an entity or individual with little or no assets that can be used in a settlement. This is a detouring 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.
The biggest reward an asset protection plan 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.