Asset Protection Planning Benefits
Properly established asset protection plans provide layers of financial security. They give peace of mind before, during and after a legal storm. So, here are some asset protection planning benefits before, during and after a lawsuit.
Before a Lawsuit
Asset protection planning instruments provide financial privacy that reduce your wealth signature from prying eyes. The US has 80% of the world’s lawyers and 96% of its lawsuits. Not only that, there are even self-help resources on state websites that tell people how to file their own lawsuits against you. So, if you live in the United States or other litigious jurisdiction, and have something worth taking, you very well may need asset protection.
We have all heard of a few hallmark lawsuits. These are cases whereby a person sues a big business for millions of dollars. Probably the most famous is the suit against the McDonald’s Corporation. A lady sued them for serving coffee in a drive-thru. The customer spilled it on herself resulting in a severe burn.
A case such as this would have contingent lawyers lining up with dollar signs in their eyes. Everybody knows that the McDonald’s Corporation is a deep-pocket defendant and they could easily satisfy the judgment.
Had the same exact coffee incident happened at a “mom-and-pop” coffee stand the story would be different. A lawsuit claim of damages in the millions of dollars would be impossible. The number of lawyers who would take the case on contingency would be far fewer.
One of the primary benefits of financial privacy through asset protection planning is that it reduces your wealth signature. With proper planning, an individual can appear to be a poor lawsuit target, regardless of how many assets he possesses.
The only way to “win” a lawsuit, is to avoid it.
During a Lawsuit or Litigation
Let’s suppose a person cannot avoid a lawsuit and litigation begins. An individual plan can make for a much more favorable outcome and a much shorter process. Once you get information about asset protection then take action. Knowing about it, alone, won’t help. You have to set up the legal tools. Then transfer your assets into them.
An individual can access properly protected assets behind strong planning tools for about any purpose. However a court order cannot attach them. In this case a legal opponent is faced with recognizing that your assets are not readily available. They are nearly impossible to seize. Therefore, the defendant holds substantial negotiating power.
After a Lawsuit – Judgments
There are planning tools available that can make an individual judgment proof. Even in the event of a legal battle that turns into a judgment, it protects one’s assets.
This level of asset protection is the strongest available and it requires a properly established and maintained asset protection trust. Individual’s have the option of creating one of these trusts in several states and a few foreign jurisdictions. It is through these instruments where assets are titled to his or her entity rather than his or her name. A trust encumbers them and the trust is settled for the benefit of one’s self. The individual can benefit from the trust assets that include property, investments, and savings. They can receive monetary distributions that cannot be used to satisfy a judgment or be distributed to any other entity or individual.
Asset Protection Planning Benefits Conclusion
Asset protection planning can provide immediate benefits to an individual’s or family’s financial future. A consultant can tailor a plan to one’s comfort level, liability, risk and assets. Pre-planning is best. You can set these tools up relatively quickly and affordably, even in the midst of litigation.