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Imagine a husband and wife out for
a drive on a rainy day, a child runs into the road, and
the worst possible thing happens. In addition to the
emotional shock and heartbreak, they soon learn that they
have been named as defendants in a wrongful death lawsuit.
They call their auto insurance agent to ask how
much coverage they have in this case, and are told that
coverage is the minimum the state requires, which is
$300,000. The insurance agent advises them that the
company will assign a defense attorney to defend them.
Some days later they meet with the defense attorney
who has requested a complete list of financial assets and
liabilities. As they prepare their financial statement
they realize what a strong financial position they are in.
They have a mortgage-free residence valued at $300,000, a
$400,000 IRA, $875,000 in stocks and bonds, and $275,000
in cash accounts. Frankly, most couples in their 50s would
feel quite secure with a net worth of $1,850,000 and
several years to earn prior to their planned retirement.
Two days later they receive a complaint from the
attorney for the child’s parents claiming damages of
$5,000,000. They forward the complaint to their attorney
and he advises them that, if they proceed to trial, they
are quite likely to lose.
He suggests that they
might want to engage in some planning to protect what they
can, but because the lawsuit has occurred, there is little
that can be done to protect assets. They are forced to
hire a bankruptcy attorney to determine how much of their
property can be protected from the $5,000,000 lawsuit by
filing for bankruptcy. The bankruptcy attorney requests a
$25,000 retainer.
It dawns on them that they had
considered a meeting with their estate planning attorney
to discuss asset protection, but decided that they were
protected with their insurance coverage and didn’t really
have time for a meeting.
Unfortunately, scenarios
like this occur every day in America; and once you have a
legal problem it’s too late to do asset protection
planning. It’s like trying to buy insurance for your boat
while it’s sinking in the midst of a storm. Planning has
to be completed when the skies are clear, and before
anyone has any possible claim on your assets. We recommend
that you contact us soon to learn about your family’s
asset protection options.
Or Click
here to have our office call to set up a time to
discuss this further
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The information contained on this web page is general by its
nature. For that reason, no one should take any action based on
the information contained in this webpage until having consulted
a competent professional advisor or advisors. Nothing contained
in this web page was intended or written to be used, can be used
by any taxpayer, or may be relied upon or used by any taxpayer
for the purposes of avoiding penalties under the Internal
Revenue Code. No information contained on this webpage relating
to any federal tax matter may be used by any person to support
the promotion or marketing or to recommend any federal tax
matter. Taxpayer should seek advice based on the taxpayer's
particular circumstances from an independent tax advisor with
respect to any federal tax transaction or matter described on
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