Lawsuits are War

“Lawsuits are war.  It’s as simple as that and they all begin the same way; a declaration of war: the complaint.”  ~John Grisham, A Civil Action

If you’ve never been served with a complaint–a notification that you’re being sued–then let me save you the experience.  It’s not good.  It will leave you’ll feeling completely vulnerable, unprepared (especially if you are unprepared), and it even causes panic in many people.  Lawsuits are war.  The people who start lawsuits and the attorneys they hire want one thing, victory.  Victory brings with it the spoils of war.  In this case, your assets.

Fortifying Assets

Asset protection is the fortification of assets.  Asset protection is a strategy that’s put in place before asset protection is ever needed.  Think of a Medieval European castle.  What good would it do to start building a moat around the castle after an attack had begun?  That holds true for asset protection planning as well.  Once you’re assets are under assault, it’s too late to plan.  In the world of asset protection, fraudulent conveyance laws require that planning be done well in advance–well before it’s ever needed.

Multiple Lines of Defense

The good news is that you don’t have to be vulnerable.  Unlike the moat around a castle, good asset protection planning is virtually impenetrable.  Like the fortifications around a castle, asset protection is a layered approach.  In other words, there is not need to rely on just one defense.  Good asset protection planning involves the use of limited liability companies, family limited partnerships, and asset protection trusts.  When used together by an experienced asset protection attorney, there is no better combination of tools available for the protection of assets.

Take the First Step Today

You can start developing an asset protection strategy right now, today.  The first step in the process is an evaluation of your assets.  As you look at your finances and other assets, you have to determine which are risky and which are safe.  Let’s look at an example.  Cash is a safe asset.  It cannot by itself create liabilities for you.  Stocks and bonds fall into this category as well.  These sorts of liquid assets, by themselves, are considered safe assets.

Risky assets are things that can cause you additional liability.  Office buildings, boats, and airplanes are considered risky assets.  Even jet skis and cars fall into this category.  Risky assets are assets that have the potential to “go bad.”  They have the potential to cost you money in the event that another person is injured by the asset or even in the case of a creditor who wants to take the asset from you.

Step one is taking an inventory.  Today is a good day to look at your assets.  Ask yourself if you’re ready to go to war for them.  If you’re not, it’ll be too late once someone else decides to declare war on you.  If you need help, contact Lodmell & Lodmell today.