While driving to an appointment, one of your employees remembers he needs to contact a co-worker regarding a meeting. He dials the number on his cell phone, and briefly takes his eyes off the road. In that instant, a vehicle in front of him shifts lanes, and he strikes it, seriously injuring a 78-year-old woman. Under exactly this scenario, a jury awarded a $21 million judgment against Dykes Industries of Little Rock, Arkansas.
Can you buy enough insurance to cover an unexpected business liability? NO. Insurance covers only a first legal defense and insurance only covers actual damages. Insurance does NOT cover punitive damages.
STATISTICS ON AUTO ACCIDENTS AND PERSONAL INJURY LAWYERS
More than 42,000 deaths occurred in motor vehicle accidents in 2001. Could one of these have been committed by one of your employees while on company business?
There’s an army of personal injury lawyers on the Internet ready to be of service on a contingent fee basis, and more are getting educated in colleges and universities. Give it a shot, use google and type in “injury lawyer” and here’s the “Results 1 - 10 of about 1,120,000 for "injury lawyer".
Why is being a personal injury lawyer a successful business? Because, one personal injury lawyer teaches other personal injury lawyers valuable information - they hold classes on how to pressurize and optimize more out of a given opportunity. Yes, it sounds like lawsuit abuse, but don’t blame them – it is a business.
The courts make it easy to litigate. They have learned that if they can tie you up in court for a number of years, it’s easier to settle than to fight. And if they can get sympathy out of a jury it translates to bigger fees. Whether you win or lose – you lose; at $350 per hour – it is expensive to get involved in a court battle even if you are right.
If you are a small business owner, the negligent action of one employee can cause you to lose more than just your business. You could become personally liable for assets not related to your business. This is where the personal injury lawyer gets "personal" with your personal assets!
HOW TO PREVENT PERSONAL INJURY LAWYERS FROM STEALING YOUR PERSONAL ASSETS
How do you prevent these injurious lawyers from "stealing" your personal assets and keep them at bay? The key is how you own your business. If you own corporate stock or sub “S” stock, chances are that most these lawyers have figured out how to pierce the corporate veil on their way to your personal assets.
If you get a high or if you’re an adrenaline junkie and like to take chances you would not appreciate asset protection. You would think that it’s for the wealthy who have something to hide. Or alternatively if you think that you’re covered by insurance, you have not been sued by a creditor and his very clever personal lawyer...yet. You are an easy target and if they deem it's worth the small fee to file a suit and a bit of their time then trust me they'll come after you - maybe not today but very soon.
HOW TO PROTECT YOUR ASSETS FROM CONTINGENT FEE ATTORNEYS
What’s asset protection? In my definition asset protection is protecting everything you have or control against pickpocket experts (i.e. personal injury lawyers or any other contingent fee attorneys) who have perfected their profession on easy targets, like you.
Each of your assets should have a financial goal. What’s your financial goal for your personal residence, your vacation spot, your CD’s, your IRA, your investment accounts, and your other valuable assets?
With your personal residence, the bank is protected by virtue of a mortgage subject to the real estate. It's your personal equity in your home that is wide open for a lawsuit. Do you have minor children learning to drive your car? Did you know that you assume full responsibility for their negligence? Do you own your home in your name jointly with your spouse? Did you know that if either one of you gets sued … you can lose more than just your house?
Another financial goal for your house is the tax deductions available for tax purposes on your form 1040. Tax law allows deduction for mortgage interest and real estate tax deduction. So there are two financial goals for your personal residence: protection from potential creditors and their counterpart injurious, villainous attorneys, and tax deductions for your interest on mortgage and real estate tax deductions.
USE THE LAW TO PROTECT YOUR ASSETS FROM PERSONAL INJURY LAWYERS
Use “law” not secrecy. Under tax law, there’s an exception under Internal Revenue Code sections (IRC) §671-§678 that allows the original owners of the personal residence to deduct mortgage on interest and tax deductions of real estate taxes paid on your form 1040.
Under civil law if your house is owned by an independent trust with an independent trustee, you will have repositioned (transferred) you home from you and your spouse to an irrevocable trust whereby you no longer own the house.
Use “law” not secrecy to reposition your automobiles, your corporate stock, your sub “S” stock, your vacation spot, your business assets, your commercial real estate investments, your CD’s, your IRA’s, your financial investments, and so on. Each of your assets needs to have a financial asset and protection goal.
Ask yourself whom you need protection from and for what purpose do you need this protection? Then select all appropriate legal entities created by “law" such as Limited Liability Companies, “C” Corporation, “S” corporation, Limited Partnerships, Family LLCs, Family LLPs, Revocable Trusts, Irrevocable Trusts, Grantor-Type Trusts, Non Grantor Trusts, International Business Companies, International LLCs, Foreign Asset Protection Trusts, Delaware Trusts, Alaska Trusts, etc. For each asset, you should determine what is your financial goal? And then what’s the appropriate legal entity to achieve those objectives?
Beginning the thought processes to implement basic measures to thwart the evildoers of creditors and all contingent fee attorneys including our very personal injury attorneys is the first step. It always starts off with just a thought, doesn't it? Plant that seed and then act upon it. You'll begin to find more restful sleep and know that you'll be making our miserable, personal attorneys find new strange bedfellows to lie with.
author bio - Rocco Beatrice, CPA, MST, MBA
award-winning estate planning & trust expert
MS - Taxation, Master of Science Taxation
MBA - Management / Taxation
BSBA - Management / Accounting
CPA - Certified Public Accountant
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Ultra Trust: Asset Protection Irrevocable Trust
West Palm Beach Accident Attorney Case
71 Commercial Street #150, Boston, MA 02109
tel: +1.508.429.0011 fax: +1.508.429.3034
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