DO YOU NEED ASSET PROTECTION?
In the course of representing a broad range of clients over a period of 40 years, many of them business owners, I have become familiar with the risks encountered daily, particularly by business owners and licensed professionals. Sometimes it seems like the job of becoming successful and endeavoring to accumulate enough assets to enjoy life when you reach your retirement years, is not only a challenge for all the usual reasons, but is equivalent to painting a target on your shirt, saying “sue me.”
We all know, from the news and articles we read, as well as friends and acquaintances who have shared their personal experiences, that there are institutions in place in the U.S. that uniquely encourage lawsuits, and that have fostered a large cadre of trial attorneys skilled at marketing their services through all the popular media, with the underlying theme that if anyone has sustained injury or loss, it is not through any fault of their own, but rather is the result of the negligence, recklessness, or intentional act of another individual, business, or organization. The eagerness to engage in litigation is fueled, in part, by the occasional blockbuster jury verdict that receives wide coverage in the news. This has resulted in a justified fear of litigation, particularly on the part of those who are working and actively contributing to our economy by rendering services to others, or by manufacturing, selling, or maintaining products we all need, use, and enjoy, but for which we are encouraged to believe we need not assume any risk. We have seen, over the years, a reduction in the acceptance of responsibility by the individual for his or her actions or decisions, as responsibility has gradually been shifted to those who provide the products and services we demand and that have become an important part of our society.
There has been a proliferation of litigation, particularly in such matters as claims of negligence, defamation, discrimination, abuse of one kind or another, nuisance, violation of any of the multitude of statutes and regulations impacting the employer-employee relationship, the rapidly evolving identification and labeling of environmental hazards, providing professional and other services, and the design and manufacture of products. It is said that some 70,000 lawsuits are filed each day in this country. Some are meritorious, some are not. The jury system, despite its merits, leads to unpredictable outcomes and verdicts.
Can you protect your assets with insurance? Clearly insurance is necessary and it is prudent to carry the customary forms of insurance that offer you defined protection against damage resulting from carefully defined hazards, subject to dollar limits, deductibles and exclusions. Insurance is designed to offer conditional protection triggered by certain types of events, and if anything, being insured may make you a more attractive litigation target. Asset protection is oriented differently: its objective is to protect your assets, whether or not the threat to those assets results from an insurable event or circumstance. The focus is on insulating and preserving your assets, often accumulated over the greater part of your working life, from the threat of involuntary loss to, and confiscation by, third parties. It involves proactive preplanning, so that you are prepared, regardless of the timing or nature of the claim asserted against you, and whether or not the claim falls within the scope and policy limits of any particular insurance you may carry. Unfortunately, asset protection is not popular or viewed favorably by those who benefit from the proliferation of litigation, and effective asset protection requires the synthesis of skills and knowledge necessary to discourage financial predators and to insure that you have the tools to best defend an assault on your accumulated wealth. It requires individual analysis of your situation and your assets.
As a member of the Asset Protection Council, I affiliate with experienced specialists to build your asset protection plan, which should be integrated with your existing estate planning. If you do not have existing estate planning, I can assist you with that as well. To get an idea of how this works, please feel free to view any of the brief podcasts explaining the key concepts of asset protection by clicking on this link - http://www.assetprotectioncouncil.com/resources/articles/key-concepts-of-asset-protection-podcast-series/. One of the most important things to remember about asset protection is that like insurance, you need to plan ahead. If you wait until a claim is made or a lawsuit is filed against you, it may be too late to take action to protect your assets, just as you can't insure against damage from an event that has already occurred. For greater peace of mind, feel free to contact me for an initial consultation.