Legal nightmares: Asset Protection Strategies

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Everyone has either experienced or know of someone who went through a financial nightmare:

The frivolous lawsuit

Fueling these frivolous lawsuits are contingent fee lawyers. Quite simply, a contingent fee lawyer is your financial nightmare. Your assets can evaporate before your very eyes. His objective is to squeeze all he can out of you. Right, wrong – it does not matter. When he goes in front of a judge he will do and say anything to intimidate you to settle. Most likely, you will be intimidated and you will settle, because either way it’s going to cost you.

An Irresponsible or Problematic Business Partner

You are in business. Your partner has become problematic. You fear the obvious.
Partners are jointly and severally liable for all legal and financial obligations of the partnership and for all wrongful acts of any partner acting in the ordinary course of partnership business.

The Slip and Fall

You are a young doctor with a young family, you just started your own practice. What if? Employees, patients, slip and fall,…but you carry liability insurance, you say.
Liability insurers have two (or three, in some jurisdictions) major duties:
1) the duty to defend,
2) the duty to indemnify, and (in some jurisdictions),
3) the duty to settle a reasonably clear claim.
After the initial defense, the insurer has three options, to:
(1) seek a declaratory judgment of no coverage;
(2) defend; or
(3) refuse either to defend or to seek a declaratory judgment.

Irresponsible or Unruly Children

Your under-age children are irresponsible, uncontrollable, in and out of trouble with the law.
A person who is responsible for the death of another may be liable under civil law, criminal law, or both. In the civil liability context, the basis of which is tort law, parental liability for the acts of minor children takes two forms: vicarious tort liability and, parental responsibility statutes hold parents criminally liable when their children commit acts of juvenile delinquency.
What if you go away for a weekend? You tell your under age kids that you and Mom will take the weekend to some not too distant site, you’re leaving Friday afternoon and returning late Sunday night. You instruct your kids: no friends at the house, no drinking, no partying. You will call to check-in, here’s the number where we will be, and of course we will have our cell phone.
Parental civil liability is imposed by most states, by statute when children are not, or cannot be, financially responsible.
See ARIz. REv. STAT. § 12-661 (1999) (“any act of malicious or willful misconduct of a minor…shall be imputed to the parents or legal guardian having custody or control…”); CAL. CIV. CODE § 1714.1 (Deering 1999) (“Any act of willful misconduct of a minor…shall be imputed to the parent or guardian having custody or control .. . “); ILL. CaMP. STAT. ANN. 740 115/1 (West 1999) (“The legislative purpose of this Act is…to compensate innocent victims of juvenile misconduct that is willful or mali-cious; and…to place upon the parents the obligation to control a minor child…”); N.Y. GEN. OBLIG. LAw § :3-112 (McKinney 1999) (”The parent or legal guardian, other than the state, a local sodal services department or a foster parent, of an infant over ten and less than eighteen years of age, shall be liable…where such infant has willfully, maliciously, or unlawfully damaged…”); TEx. FAM. CODE ANN. § 41.001 (West 1999) (“A parent or other person who has the duty to control…the negligent conduct of the child if the conduct is reasonably attributable to the negligent failure of the parent…or…the willful and malicious conduct of a child who is at least 12 years of age but under 18 years of age. “)

The First Children and the Second Divorce

You’re in a rocky second marriage. You are constantly putting out fires. You are waiting for her to take half and wondering if your child from your first marriage will get anything.

What is the best asset protection solution?

Do any of these, sound familiar?
Protecting your assets from a frivolous lawsuit or any other contingent fee professional can only be accomplished through a timely implementation of an “irrevocable Trust, with an independent Trustee” Period. For added protection you elect to have an “independent Trust Protector.”
Most people, like you, procrastinate. They know the risk but fall short on implementation. Sound familiar? You will not act until it’s too late.
Fraudulent conveyance” is the primary risk when you try to move assets in a crisis situation. It’s too late, says your lawyer. A judge will undo any of your planning, and your lawyers will unlikely help you because he will become a civil conspirator and possibly lose his license to practice.
Is your lawyer, right? Can he lose his license? It depends on the circumstances.
The critical part not taught in school, is avoidance of the fraudulent conveyance claims by potential past, present, and future (not yet born) creditors.
What they overlooked was that the movement/repositioning of any assets…relies on the theory of a “fair” “exchange.” You give me $100 I give you back $100, that’s the “exchange.”
I perfected the “method of exchange” to AVOID fraudulent conveyance, civil conspiracy, avoiding the trigger of income taxes, resulting in the elimination of probate, elimination of estate taxes, elimination of Medicaid and state recovery of Medicaid, avoidance of the Generation Skipping Tax, Tax deferral and tax-free wealth accumulation, reduction of frivolous lawsuits, eliminate ex-spouses, your business partners, greedy and clever lawyers with their contingent-fee clients, and put monkey wrenches into the legal system to make them spend money. Finally: dictate from your grave the distribution of your assets. …. Oh, YES. It’s been tested.
When our Ultra Trust® is combined with the method of exchange, it’s the best you can do without having to go offshore.
Category: Asset Protection

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