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by Randy Hughes on February 24, 2009
Do you wait until your house is on fire to buy fire insurance for your home? Why would you work so hard to acquire assets and build a large net worth and not learn how to protect those assets from attack? Some people work an entire life time building their estate just to lose everything to a frivolous lawsuit. Does this sound like your way of thinking? We hope not.
Hopefully, you are not naïve enough to believe what you were taught in school, that our judicial system is fair. Once you have two cents to rub together, you can and will face an attack.
It is especially hard to protect real estate from attack as apposed to stocks, bonds and cash. Real Estate is attached to the ground and cannot be moved from jurisdiction to jurisdiction for protection (or can it?). With the simple stroke of the pen any judge with jurisdiction over the dirt can undo lots of fancy planning. The judge will bend the law if necessary to provide a justification. It is best to extract and protect the equity in real estate if trouble comes. We have actually been in front of a judge that said, “I do not care what your lease says, I am going to rule against you anyway.”
The bottom line is that you should never trust our judicial system to be fair. Sometimes, if you can afford it, our system will surprise you and do the right thing. However, never ever count on this.
The beauty of asset protection planning is that you never have to trust the judicial system to be fair. You make it fair by your actions and planning ahead.
Recently, a man named Madoff cheated thousands of investors out of billions of dollars. The Madoff fiasco is a crystal clear example of how you can be financially blindsided in this world. It is the perfect lesson for why your assets should not be in one basket (or one land trust). Your assets should be placed into separate land trusts to insulate each property from the other.
Start now or forever hold your peace!
