PROTECT YOURSELF FROM OUR LITIGIOUS SOCIETY Presented by Jim Williams www.abd2win.com 1-866-249-2472 Toll Free We have all seen
ads: “Have you been injured? You may be entitled to a Cash Award!” or “If you lost money in stock market because of your broker’s casino mentality, call us to recoup your losses!”
It’s sad but true… If you accumulate wealth, you become a target for lawyers, IRS or someone with less than you. The good news is that you can protect yourself from a devastating lawsuit.
Did you know that you have a 1 in 4 chance of having a potentially devastating lawsuit filed against you sometime in future? There are currently between 80 and 90 million lawsuits filed in this country each year. That is over 150 suits per minute! Over 70% of world’s lawyers are right here in USA, and we are adding new ones at a rate of 50,000 per year! What do you think those new lawyers are going to do to number of lawsuits filed annually?
Unfortunately there is no way to completely avoid possibility of being sued. There is, however, a way to reduce risk of a devastating lawsuit, and to protect you personally should a lawsuit be filed. What you need to do is to arrange your affairs so that any activity that could create potential for a lawsuit is transacted in a manner that will not affect your personal assets. Whether activity is an operating business, rental property or any other “risk” operation, you need to separate yourself from those operations through corporate entities.
John D. Rockefeller once said: “Own Nothing, Control Everything”
If you do not own anything, or it “appears” that you do not own anything, no lawyer will sue you unless someone is willing to pay his exorbitant hourly fees. If, on other hand, lawyer sees substantial assets, he may very well take case against you on a contingency basis. Attorney’s contingency fees in US currently run in excess of 10 billion dollars per year!
The best way to protect your personal assets from this “lawsuit-crazy world” is by forming a legal entity separate from yourself. This can be a Corporation, Limited Liability Company, Limited Partnership or some combination thereof. However, you must keep in mind that in order for an entity to give you protection you need, it must be set up and operated properly, and type of entity or entities must fit your particular situation. If set up properly, your entity will not only give you protection you need, but will, in most instances, pay for itself many times over in fringe benefits and tax savings. To find out more about differences in each of these and other business structures just pull up our web site www.abd2win.com and go to our “Business Structures” page.
The benefits and protection afforded by properly structuring and separating your “risk” activities, like your business interests and real estate holdings, from your personal assets can be clearly seen with following example:
John is a computer consultant that works out of a small office in downtown San Jose, California. His wife works with him part-time doing books and records and other office duties, and she is his only employee. John’s net income is currently $80,000 per year before taxes. He generates 75% of his business income from services, and another 25% from sale of related software products. John and his wife had been operating as sole proprietors – under their own names, without a corporate structure -- for over 10 years until early in 2003. They had been able to acquire several rental properties over years, and were becoming concerned about protecting their assets
