In today’s highly litigious society, fast food chains are successfully sued when a woman spills coffee into her lap, and homeowners are successfully sued when a burglar gets hurt breaking into their home.  Perhaps of greatest concern is the growing list of lawsuits being filed against high income and high net worth individuals, especially physicians, business owners, executives, and corporate boards of directors (see "Lawsuit Hell" article in Newsweek, December 15, 2003). The atmosphere of fear and paranoia this risk of litigation creates can sap the joy out of nearly any profession. 

Sarbanes-Oxley is now in place to prevent or reduce corporate corruption as a result of ENRON and MCI-Worldcom, but what about the smaller or non-public companies? They face different liabilities, often personal liabilities, and their personal residence can become part of a judgment, just like their checking and brokerage accounts. Juries are often not sympathetic to the wealthy business owner or professional, identifying more closely with the “little guy”, and, thus, likely to side with the plaintiff. Personal lawsuits are also something which create concern, particularly outrageous claims from neighbors, “friends,” business associates, or casual acquaintances.

What can you do to protect yourself? And how do we help protect you?

The first and most important step all professionals should take is to choose experienced, conservative, and creative advisors, and to so before any litigation is pending. Your choice in advisor will be key to creating an appropriate and reliable plan. Not all advisors are created equal, and our clients count on our asset protection strategies to protect their life's assets. With that in mind, our recommended attorneys and tax-advisors have done hours upon hours of due-diligence, and have found our asset protection techniques to be, in their estimation, solid and likely to stand up to nearly any challenge.

Capital Preservation Group's role includes providing you with unique and creative asset protection strategies and access to world class attorneys and tax advisors.  In addition, we guide you through the steps to implement these strategies. Our techniques can make you or your business a less desirable target for litigation. After implementation of our strategies, it is common for plaintiff’s attorneys, after doing an asset search, will recognize that even in the event of a judgment against you, the likelihood of a payout to their client is exceedingly slim. Plaintiffs are generally advised to drop the lawsuit altogether, or they encouraged to settle for pennies on the dollar.

Even if you are never sued, the ancillary benefits of creative asset protection work allows for significant income tax and estate tax protection, and helps to hedge retirement savings against market volatility and inflation.

What does Asset Protection entail?

Proper asset protection begins with the prudent use of investment vehicles which are protected by law, such as those provided for by state and federal exemptions (like ERISA-qualified pension plans), proper titling of assets, and avoidance of common asset protection traps. An asset protection plan may also include the use of Limited Partnerships, Limited Liability Companies, Trusts, and Captive Insurance Companies. Which particular combination of these financial tools that will work best for you or your business will depend on your assets, your state of residence, and your financial goals.

For example, our organization represented a physician client in North Carolina with a net worth of more than $15mm. His sixteen year old daughter had an auto accident bringing about a suit for millions (the damage claim went up when they discovered that her father was a physician). Fortunately for the family, one of our partners had been engaged to put together a comprehensive asset protection strategy before the accident took place. When all was said and done, a frustrated plaintiff’s attorney had to settle for the insurance money plus $35,000 (in essence, pennies on the dollar). Our client was in control and his assets protected. As you might imagine, he was very pleased with our work. Many others have successfully wrapped their assets in a protective veil with our guidance and the legal work of one of the nationwide asset protection attorneys we would recommend

What needs to be protected?

It is important to meet with a Capital Preservation Group advisor to do a complete check-up of your existing assets and to determine which assets are exposed. Once you determine which assets need to be protected, we can design a plan that best fits your situation into your comprehensive wealth protection plan.  Click below to see our asset protection checklist.

We can help protect:

• investment accounts
• rental properties or other real estate holdings
• accounts receivable
• car collections
• beach or lake houses
• primary residence
• other important and vulnerable assets

Conclusion

Too many professionals and executives spend time and energy worrying about building corporate and personal assets while ignoring the need to protect those assets. It goes without saying that this kind of planning is considered “important, but not urgent” and is often times put off until it is too late. By meeting with a Capital Preservation Group advisor, you can get a better handle on your present situation and learn how implementing an asset protection plan may help protect your business and personal assets from personal and business lawsuits. In that process, you will likely learn how to enhance your existing estate plan and reduce your income and estate taxes during the process. Contact us so that we may direct you to the most appropriate asset protection advisor in your area

CPG Asset Protection Checklist