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New Actions.

By John Dietz - Email Editor

Date : 08-Jan-2008

I hope your New Year was pleasant and healthy and you had time to reflect and gain perspective on what is a priority in you life. Today's discussion is grounded in promoting action instead of merely getting you to think.

There is an explanation as to why you have not protected your assets (congratulations if you have). If you have, you will relate to the following “initiative” that took place prompting you to take action.

Why is it we all wait until the last minute; why is that we put important life decisions off until we really need too? There is a perfectly logical explanation as presented by Sir Isaac Newton (1642-1747). Everybody continues in a state of rest, or in uniform motion, until compelled to change that state by forces imposed upon it. ( Newton 's First Law)

In reality, the result is not the difficult part to achieve, it is initiating the change that is difficult to achieve. What then stimulates us to make this change? We know for certain that “threat” is an absolute stimulation and we face these calls daily, but for many the action is simply too late and they fall into fraudulent conveyances.

As we also learn from Sir Isaac Newton, not all forces are equal. However, the force applied is equal and in the same direction of acceleration in physics and in debtor-creditor law. Once a person has a pending suit, their need to protect their assets is “swift and eager.” These external threats (initiated by an outside party or event) definitely heighten the emotion surrounding the decision-making. Here are some current examples and situations of “external” threats.

In civil actions in the US it is possible that one in six jury awards will be over one million dollars. One in every four Americans will likely become a target in a lawsuit this year. Almost every American will have to defend themselves in some type of civil action in their lifetime. One in five suits will completely decimate the underlying assets. According to Lawyer Weekly, the total amount of jury's awards in 1999 was three times higher than in 1998 and twelve times higher than in 1997. Stabilization depends on each state as they pass or deny the rights for and against Tort Reform, issue-by-issue, damage by damage. Several states have abolished the right to appeal any caps on damages and ruled Tort Reform as unconstitutional. Many judgments are reduced on appeal, but in many states, the appellant is required to produce a bond of 150% of the judgment. Tort lawyers routinely go jurisdiction shopping; looking for places that award judgments in their favor. Close to 19,000 medical malpractice payment reports were made in the US in 2006 according to the Annual Report, National Practitioner Data Bank. It is estimated that about 25% of all the doctors in the United States are sued on an annual basis. This means that if you are a doctor, especially if you are a surgeon, you have a one in four chance of being hit with a lawsuit each year you are in practice. The National Practitioner Databank reported that there were 1,530 medical malpractice reports filed with them regarding resident or intern physicians in the US between 1990-2004 Source: NPDB Summary Report, National Practitioner Data Bank. Thirty-three percent of all malpractice trials were against non-surgeons. Source: Bureau of Justice Statistics. Tort lawyers routinely look you up to see if the defendant is worth suing; looking for real estate, cars, credit reports, bank accounts and portfolios. Advertisements for cases have been a recent addition to print and television (about twenty years in the making). Over the past five years more than 7% of all US Companies, both large and small suffer lawsuits costing them individually more than 5 million. Contingency fees to attorneys are generally 30 – 40% of the total awards. The EEOC reports in ten years lawsuits have increased 32% from 1996 – 2006. Civil lawsuits in the US are now exceeding 15 million per year. Trial lawyers not including judgments earned a purported 40 billion dollar payday from Tort Litigation. According to the USPTO (United States Patent and Trademark Office) 98% of all patent litigation claims were valid. Eighty percent settle out of court for an average award of 5 Million. The IRS claims that 70% of all small business owners do their taxes wrong. Joint and Several Liability allows a plaintiff to recover from multiple defendants; in a state that follows the rule of Joint and Several Liability a plaintiff that sues three defendants of which two are 95% liable, but are also bankrupt, the plaintiff is entitled to recover 100% from the third defendant who was found 5% liable. (Alabama , Delaware , DC, Indiana , Kansas , Kentucky , Maine , Maryland , Nevada , North Carolina , Pennsylvania , Rhode Island , Tennessee , Virginia denote states where there is NO protection from Joint and Several Liability). In other states, there may be caps or limited exposure (American Tort Reform Alliance 2007). The Collateral Source Rule – This rule says that evidence may not be admitted to the court to show that other outside sources, such as insurance and workers compensation have contributed to the damages of the plaintiff. Twenty-eight states still honor the Collateral Source Rule in the US court system (ATRA 2007) Twenty states in the United States have no limits or caps on punitive damages (ATRA 2007). Punitive damages are monetary awards to punish the defendant. Sixteen states have initiated Prejudgment Laws, meaning that interest is due to the plaintiff (if they succeed) from the time the suit is filed, until the time the suit is fulfilled, usually prime interest plus 2-3% (ATRA 2007).

Any one of these situations would prompt someone to want to protect their assets. In these cases, there are “third parties” who want to be the “takers.” These scenarios are imminent and scary! These are the situations where a third party is looming to reach out and take what is yours (rightfully or wrongfully), but the scary thing is that you have no control. The best-case scenario is a potential out of court settlement if you put a rocky road in front of the plaintiff. If the door is open, creditors will walk in and take all; it happens everyday to naïve, unaware and negligent defendants.

Occasionally, I get a phone call from someone, usually a young person, who says, “I've started this venture (or business) and along with my every effort to be successful, I want to protect what I am building” and “I want to protect my home and pension for the next generation, what do I have to do?”

Hallelujah! The internal light bulb does go off for some!

These people have felt some internal movement of awareness stimulating their intuitive inertia. Maybe it is their “hunch”, maybe it is their awareness and education, but they understand the changes in society and truly feel the “shifts.”

Change is not easy by any means. I think that Robert F. Kennedy (1925-1968) summed up “change” accurately. Great change dominates the world everyday; either we change with it, or become its' victim. Ideally, a wise person believes that “all that survives is change” and “only the strong survive through change.”

I believe that this is the right time of the year and the right time in history for all people to initiate asset protection plans.

I can only assume if you are a normal reader of this newsletter that you are of the age where starting over again is not an option.

It is time to take a minute and sort things out.

Until next time,

John

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