Email Article Print Article

Asset Protection Planning Stops Suits…. NOT.

By Rob Lambert - Email Editor

Date : April 03, 2008

The economy is getting worse and there are more and more lawsuits. They are often brought because somebody is short on money and just didn’t do the right thing, or to buy time. The reasons do not matter. What matters is that there are more and more of these things we call lawsuits. Each is like a little Nome with different characteristics… The only thing in common is that all lawsuits are “bad” and “bothersome” to those on the receiving end.

All Asset Protection Planning techniques are designed to help you preserve and maintain your “stuff”, whatever it is. If you worked for this “stuff”, you want to keep it. Simple as that.

It is important to understand one thing that Asset Protection Planning will not do. It will not stop lawsuits. If you are perceived as having something worth taking, you can count on the fact that there is some greedy, underemployed tort lawyer ready to try and take it away from you. This is regardless of whether or not you have an Asset Protection Plan.

FACT: ASSET PROTECTION PLANNING DOES NOT STOP LAWSUITS.

Suits still come no matter what Planning you have in place. All a Plan does is destroy the economic incentive to pursue litigation. It does not prevent the filing of cases. We correctly assume that most plaintiffs, and all lawyers, are greedy and want money.

Asset Protection Planning just tips the scales a bit. In particular, if you have an old and cold Plan properly implemented when the financial seas were calm, you now have an effective tool to settle, with favorable results, that much dreaded suit.

SO, I encourage my customers to not expect any Asset Protection Plan to stop the dreaded suit. The Plan just gives you an effective tool to get out of the suit. This simple fact also changes the landscape a bit. For example, once this simple fact is understood, it soon becomes clear that keeping basic insurance in place to provide a defense makes great sense. It also soon becomes clear that relying on stealth alone (e.g. phony Nevada corporations and similar techniques) are nearly worthless as a deterrent. Why? Because the basis of these terrible techniques is stealth and the facts of the Plan cannot be safely disclosed. All solid Planning should assume that a Plan works and is not offensive to any judge even though the bad guys discover the details of the Plan. In fact, in many cases, one of the techniques we utilize is to actually disclose the generic structure of the Plan to the bad guys to take the wind out of their sails. Once a plaintiff and his lawyer realize that they will spend a dollar to collect ten cents, they often go away or settle.

Now, to borrow from some old newsletters:

SOME THOUGHTS ON SETTLEMENT

We all hate lawsuits (well, everybody except tort lawyers!). They waste time and money and they are seldom fair. Even so, I often say to clients facing an expensive and burdensome suit: A BAD SETTLEMENT IS ALWAYS BETTER THAN A GOOD LAWSUIT. In the same way that most greedy tort lawyers will not litigate on principle, a protected person should not defend a suit on principle alone. Sometimes paying a little blood money to some rotten extortionist is better than spending ten times the blood money on legal fees defending yourself.

So, when the dreaded suit comes, recite the above manta. Sometimes a little peace is better than the joy of truth.

RELATED ARTICLES:

• Protect the equity in your home
• Asset Protection Plans
• C.A.L.M. Introduction
• Get educated on Asset Protection