JK Lasser's New Rules for Estate, Retirement, and Tax Planning, 6th Edition

CHAPTER 15Asset Protection Strategies

One of the most significant threats to your wealth management plan is a potential legal judgment. Many lawsuits are unfounded but nevertheless result in settlements as less expensive alternatives to a trial. Almost by definition, if you are reading this book, your income and/or net worth places you in the top 10 percent of wealthy individuals in this country. However, a jury may be composed of people who are not wealthy and may not sympathize with a defendant who is. Remember, too, that plaintiffs (the people who sue you) have nothing at risk except their time. Their attorneys typically take their cases on a contingency basis, which means that the attorneys receive no compensation if their clients do not win. Thus, the attorneys are in effect spending their own money prosecuting the case. This can cost anywhere from a few thousand dollars to several hundred thousand dollars of expenses as well as attorneys' time. Talk about an incentive to win a case! You may assume that attorneys review potential cases based on the merits of the facts. Unfortunately, that's often not true. Some attorneys consider the probability of winning or losing a case with little regard for right or wrong. This use of our system of justice has resulted in a litigation crisis in America. It is your responsibility to make sure that you and your family are protected as much as possible from such problems. In this chapter, we discuss the various strategies you can use to ...