A pending case in the federal courts shows that the legal system can victimize you as fast as any crook.
The case involves a promoter of a Ponzi scheme who bought some $1.2 million of valuables from a local retail dealer. The schemer is discovered, arrested. The valuables, along with other assets in his possession, get seized.
The jeweler tells the government that he'll pay back the purchase money in return for the valuables. The government says no.
A fast as the lawyer for the investors can get paid a retainer, an involuntary bankruptcy is filed against the schemer. A bankruptcy trustee is immediately appointed who promptly sues the retail dealer for return of the $1.2 million.
In the meantime, the government sells the valuables at a big discount and keeps the proceeds, claiming they are the proceeds of money-laundering.
The retail dealer, who was not an investor in the Ponzi scheme, loses $1.2 million of valuables, and is being sued for another $1.2 million.
It may sound outrageous and disconnected from reality, but the lawyers say that this is the right result from applying the law.
Like the jeweler who is facing a major loss, the same thing can happen to you.
Are you ready for the unforeseen liability risks that actually happen so regularly in real life?
Is your best defense to rely on the legal system to protect you? Or are you better off taking steps to protect your assets and wealth from the risks of lawyers, juries and judges? Dealer's choice.
The thing about lawyer jokes, which the bar does not think are at all funny, is that people find them funny because they are based on their reality.
Do you think that if you got caught up in litigation that you will have a jury of your "peers"?
How about the idea that you will win or lose depending on whether you get a "good" or "bad" judge?
Perhaps, lawyers, juries and judges just prove that every man or woman is fallible in all sorts of ways.
Is your belief in the legal system reasonable or just a form of delusion?
Lenny Bruce, the break-through comic, once said, "In the halls of justice, there is more justice in the halls."
Without question, the courts are about money even if not necessarily about justice. Lawyers know that following the money is what counts in winning a case. Money is readily identifiable and quantifiable, justice is not.
There are protective tools and techniques which can be used to protect your future financial security from liability caused by a loss in the courts. But asset protection planning needs to be taken as early as possible.
For many, integrating their estate planning with asset protection planning is the best way to go. Two for the price of one. Eliminate potential estate tax and current financial liability both in one package.
For others, protecting wealth is a much more complex exercise involving arbitrating the planning between an unfriendly legal system (i.e. the United States) with a more debtor friendly legal environment (someplace other than the United States) .
While this retail dealer case may involve an unusual legal situation, it shows that the legal system can create liability that you have never thought possible. That is, unless you have properly planned for the unexpected legal liability.
More Posts by Denis Kleinfeld
© 2016 Newsmax Finance. All rights reserved.