Asset Protection: Understanding the Legal System
We discuss why you need to protect your assets. Then, we examine the U.S. legal system – which is now a legal predator hunting ground. Initially, when the founding fathers created our legal system, they crafted it with four fundamentals in mind. Discouraging litigation is the intent of all of them. Litigation is how lawyers are able to use the system to their advantage and paint pictures of legal liability. It is how a legal opponent can actually extort your money. An asset protection plan is the answer. You remove your assets from this litigious environment and take your wealth out of the reach of the legal system.
Related: What is an Asset Protection Plan?
The Importance of Asset Protection
Let’s examine the path of the legal system and what that means for you. The first role of the lawyer was to be an intermediary. In complicated world, a professional guide was necessary.
Our Legal System Was Based On:
- No Contingent Fees. When our forefathers constructed the legal system, there was no such thing as a contingent fee. As it is now larger payouts mean more money for the attorneys. This makes it in their best interest to seek outrageous settlements.
- No Advertising. Lawyers were not allowed to advertise and forbidden to promote their services.
- Ethical Standards. Lawyers had a strict set of ethical guidelines.
- Rules of Civil Procedure. When the framework of our legal system was first designed, the rules of procedure made it difficult to start a lawsuit.
At some point, the legal industry started to change things. Lawyers started acting like commercial entities looking at their bottom lines. The only things standing between them and doing this was the above framework. 1964, Maine was the last state to forbid contingent fees. In 1977, the Supreme Court allowed advertising, with some checks and balances. Each state monitored the lawyers. They limited advertising to the name of the law firm, the general practice areas and fees.
Ethical rules for lawyers were very strict. There was an ethical rule, the ethical canon, which explained the rules very specifically. Then there was notes to explain all of these ethics and canons. Up until 1983, the ABA issued a streamlined version of these ethics. These changes led to the downfall of a litigation void legal system. These changes to the legal system actually encourage lawsuits.
We now have legal system that encourages lawsuits. Lawsuit times average 4 years. Lawyers are able to litigate at your expense. The law requires you to respond to legal proceedings or lose automatically. Where does that leave you and your assets in all of this? Asset Protection Plans are like lawsuit discouraging measures. If you want to keep your assets, protect them correctly.