How to Protect Your Assets From Lawsuits Part I

The major risk to assets that Lodmell & Lodmell has fought against is the risk that legal claims pose to assets.  It’s been our focus for a very long time, and we are very good at protecting against legal risk.  We began with the simple question of how to protect your assets from lawsuits.  The answer to that question is found in three legal tools–tools that must be used together and in conjunction with one another.  None of the tools alone are sufficient to protect your wealth.  They must be used in a very specific manner that accomplishes several tasks:

• The structure must separate the concepts of legal ownership from legal beneficiary of the assets.
• The structure must not ever require you to lie or hide your planning.
• The structure must have an offshore component that places your assets beyond the reach of courts in the United States of America.

A Primer on How to Protect Your Assets From Lawsuits

The three legal tools mentioned above are as follows:

• A family limited partnership
• One or more limited liability companies
• An international asset protection trust

These tools work together to place your assets beyond the reach of your creditors, if you are ever sued and there is an attempt to collect on a judgment that is adverse to you.  The number one rule, however, is that you must respect the asset protection plan.  It must exist separate and apart from you as an individual, and even though your business may be held within the structure, it’s very important that you understand one simple concept: Your asset protection plan is intended to protect your assets from lawsuits filed against you, and it is intended to protect you from liabilities created by your risky assets.

The distinction made above in bold is the distinction between inside liabilities and outside liabilities.  That concept might seem a bit abstract, but it’s important that you understand the concepts  involved with asset protection in a concrete, real way, because the risk posed to your assets by legal claims is very real, especially if you are a business owner or high income earner like a doctor, dentist, chiropractor, or real estate developer.

Asset Protection: More Important in a Tough Economy

If you have any measure of wealth, asset protection planning is more important than ever.  As the economy gets tougher and tougher, plaintiffs lawyers start scrambling to file more lawsuits in an effort to pad their bottom lines.  That’s why you need protection from legal claims.  Don’t wait too long to “do your homework” on asset protection.  The day a suit is filed against you, much of the value that we can provide you via the asset protection tools discussed above goes out the window.  The time to plan is now.