Protect Your Assets
Monday, July 21st 2008 @ 11:29 AM
Bullet Proof Your Assets Against Lawsuits
Louis Monsour
Ladies and gentlemen: You must remember that this is your future and present livelihood; your future and present asset collection; and your past, present and future hard work at stake. No one can assimilate into an operational, cohesive and affordable asset protection plan better than you.
The information you need to organize a plan tailored to your situation is found at www.MakeItandKeepIt.com. This article will outline some of the highlights of asset protection. An attorney or accountant, if they are knowledgeable about asset protection - most are not - will charge you a few thousand dollars. Why not start protecting your assets immediately by setting the process in motion yourself?
All that is necessary for you to initiate your asset protection plan is to incorporate and maintain that corporation as a separate entity (person) from yourself. And you were going to pay thousands of dollars to an attorney or some website to incorporate you. First, very few, if any, of the websites will help you decide which entity to form and then they will charge you to incorporate you. Second, if an attorney incorporates you he/she will charge you every time you have a question. The site www.MakeItandKeepIt.com was established to constantly provide you with information and answers to your questions regarding your corporation and your asset protection needs among other business related issues.
A corporate entity is Mandatory, Affordable, Simple and a legal method to protect your assets in addition to taking advantage of tax breaks provided by the IRS.
Remember that vultures are lurking in the world to pounce on you and try to suck you dry. Please do not confuse this reality with pessimism. I am one of the most optimistic people you will ever find and yet one of the most realistic people as well.
The reality is people will sue and you want to make sure you plan well enough so that they do not sue you and if they do you do not lose any of your assets. One of the things to remember is that if you establish a good enough asset protection plan most attorneys will not sue you since they will be unable to find assets from which to collect a judgment if they prevail in the suit.
One of the ways to protect your assets from these attorneys is by forming various corporations for various aspects of the business and for the various businesses which deal with each other. This topic, and specific examples, was discussed under a different article titled, Starting a Business.
Do you remember our MOTTO?
If you plan on being in business you better plan on being successful;
and if you plan on being successful you better plan on being sued.
So if you are able, and you are legally, to hide your assets you can actually avoid, yes avoid being sued. When an issue arises an attorney will research you and your business before he files a lawsuit against you. What he finds will be the determining factor in whether he will advise his client to pursue the lawsuit or not.
Even though the attorney is supposed to act for the benefit of the client he also must weigh his rewards as well. Even if you have a great case and you are 100% likely to win, but the defendant (the person being sued) does not have any money or assets to liquidate into money for you to collect then what is the purpose of filing the lawsuit and spending money on the suit.
Sure, sure there are principle lawsuits – you know where it is the principle of the thing not to let so and so get away with what they did. Many cases for monetary gains (civil lawsuits) are handled by attorneys on a contingency basis. In other words the attorney will take the case and will receive payment from the judgment collected from the defendant. If the defendant does not have any assets to collect, how will you or the attorney get paid? You are not.
Do you know anyone willing to work for 40% of nothing? I don’t. When an attorney takes your case on a contingency basis and the defendant has no assets do you think he is likely to be all gun ho about spending his time on that case? Although sometimes they use it against the small businesses and try to scare them into settlement.
You want to be like John D. Rockefeller, he created one of the richest families in the Untied States, who once said, “I want to own nothing but I want to control everything.”
Mr. Rockefeller was an incredibly smart man. He not only did he know how to make money but he knew how to keep it. He sure did not let anyone take it away.
If you do not have any ownership over any assets then no one can demand any assets from you. You can control all the assets in the world and not own it. I know this may sound like a grade school English lesson, but most of us do not break down and analyze every word we hear separately. Law school forced me to do that and I shall pass that on to you.
If you are permitted to control and drive a Rolls Royce, even though you do not own it, no one can demand it from you.
If you have control over a million dollar and no one can find it or no one can show that you own it then no one can demand it from you.
There are two ideas here:
1) If you don’t own it they can’t take it from you.
2) If they can’t find it then they can seize it.
I am not a fan of bankruptcies – I would prefer a deal be worked out to repay the debt than to walk away. However, if you own the business which falters, whether you work out a repayment plan or declare bankruptcy, you must insure that the negative effect either way does not reach your personal assets and affect your family.
It is irresponsible to not plan ahead of time so as to protect your family. They should not be made to suffer in any way as a result of your adventures into business. If you plan properly and gain the proper advice and guidance then you should not be suffering either.
Again I reiterate that under no circumstance am I advocating defrauding anyone.
YOU MUST BE RESPONSIBLE AND HONEST.
The reality is that people will sue you and you may even become bankrupt. I pray that such bankruptcy is only monetary and business related and not moral bankruptcy.
I HAVE HEARD SOME RIDICULOUS STATEMENTS IN MY TIME and of the most ridiculous is …
“You should and it is better to start your business as a sole proprietor in the beginning.” That is horrid advice.
Do you know people who know just enough about a subject to be dangerous. This is the type of person who makes these statements. You see, they know enough to throw out the words but they don’t know the reasons why they are saying it and therefore cannot explain or quantify their statement.
The statement should have sounded like this…
“It is better to start a business as a sole proprietor if you are not likely to be sued, you do not need to build up corporate credit, and tax ramifications are not an issue at this point in time.”
These are the three main reasons to incorporate.
The bad statement is wrong for several reasons…
First of all, a general statement like that can never be made. EACH PERSON’S SITUATION IS UNIQUE AND REQUIRES SPECIAL CONSIDERATION.
Second, many businesses would be foolish to start as a sole proprietor – which also means that some may be acceptable in doing so.
Third, if you truly understand business, as you must in order to be successful, you should already be leaning toward incorporating.
Fourth, ignorance…
I went through law school but do not ask me to help you out with immigration or an environmental issue – that is not my area of expertise. Whoever is giving you the advice make sure they are competent experts in that arena.
Let me give you some statistics:
According to the Anderson Law Publications in 2003 “The fastest growing group of millionaires created was the LAWSUIT millionaire.” The sad story is that most of these lawsuit winners filed frivolous lawsuits. Frivolous lawsuits are those filed without any merit to the allegations, but nonetheless are allowed by our legal system.
More people became millionaires from lawsuits than from Real Estate, the Stock market and the LOTTO.
My father had never been sued until he owned a small gas station and repair shop. He was sued for $100K and the man walked away settling for $100.
THAT IS CALLED A FRIVOLOUS LAWSUIT. IT HAS NO MERIT BUT IT WILL COST YOU ATTORNEY’S FEES TO DEFEND IT. Most people, like my father will settle it instead of wasting thousands trying to defend it. My father was very lucky he paid $3,000 for the first part of the work the attorney did and then settled for $100. Some pay Tens of Thousands to settle their suits because it is cheaper than defending it.
In 2003 $152,000,000,000 (that is Billion dollars) were spent on defending frivolous lawsuits.
According to the Census Bureau, “There are more than 2 LAWSUITS for every business in operation today.” Think of it this way. In the UNITED STATES there is one lawsuit filed every 30 seconds – 24 hours a day – 365 days a year. And we wonder why our legal system is so inefficient.
According to the American Bar Association, “9 out of 10 lawsuits in the world are filed in the United States. We have less than 5% of the world’s population but have 80% of the world’s attorneys.” The problem is the United States allows attorneys to file suits and do so on a contingency basis. Contingency basis means that the attorneys will not require payment from you, the client, but will collect 40% of whatever he is able to receive from the other side. That includes any settlements which the other side may offer. So the attorney may never even get to court but may scare the other side about accruing so much expense in defending themselves that they will settle the case and he makes a pretty penny for a few days worth of work.
According to the Insurance Institute of America, “There’s a 1 in 3 chance that the average person will be sued this year.” As a business owner the chances are 2 in 3.
BECAUSE you need to plan for it so that it does not wipe you out.
MAKE IT AND KEEP IT aims at developing businesses for success and an essential part of that development is protection.
I think it is irresponsible for an attorney to incorporate you and not educate you on asset protection. They charge on average $2100 for filing the paperwork – Although it sounds expensive it is well worth it to get done correctly and if you get all you need to protect yourself.
When I was in Law School not once was I ever taught that I had to provide advice and service to a client unless they ask for it and of course pay for it. Most definitely we were not taught to provide year round consulting for a flat fee.
Most people cannot afford or are not willing to spend $250 per hour for an attorney to educate them on all the aspects of their new corporation.
The MAKE IT AND KEEP IT membership is intended to answer your questions and it is intended to provide you with that support for the life of your business if you so choose.
When you protect your personal assets do not forget your corporate assets. It is amazing how many people forget about their corporate assets. They usually outweigh the personal assets.
Think of it as an insurance policy which is protecting everything, I mean EVERYTHING, you own.
YOU MUST BE RESPONSIBLE AND HONEST.
EVERY DECISION MUST BE A WIN – WIN Decision.
If you borrow pay it back…
If you earn money pay taxes… - don’t pay more than necessary
AVOID Lawsuits by protecting yourself…
and if you get sued WIN – or at least make sure you DO NOT LOSE.
God Bless and remember…
PROSPERITY is the name of the game…
So GET STARTED ….
MAKE IT AND KEEP IT!!!!