Tags: litigation | suits

Are You Prepared for a Legal Disaster?

By    |   Monday, 30 August 2010 10:41 AM

As I mentioned to Newmax CEO and Editor-in-Chief Chris Ruddy not so long ago over dinner at Abe and Louie’s in Boca Raton, “Everybody is scared stiff of getting sued.” Chris, knowing he was having dinner with me a lawyer, wisely picked up the check, just in case he ever needed me for some advice! (Smile)

My point is that, one day you’re financially secure, or at least surviving, and the next, you can find yourself being drained dry paying legal fees. Followed by paying even more fees to fight off the collection on a judicial judgment that promises to wipe out a lifetime of your hard work. Or an inheritance.

As we read in our newsletters and newspapers and hear on television about some of the wacky, as well as the well-founded, lawsuits filed every day. The legal industry is in high gear. And judges like job security too.

I have mentioned more than once that Americans realize that litigation, whether between private parties or any one of thousands of government agencies, is the new national sport, governmental regulation the national religion, and deep pockets the newest holy grail.

As Lenny Bruce, the philosopher comic, once said, “In the halls of justice, there is more justice in the halls.” The justice of a cause is proved by winning — whatever it takes. Mortal combat by the Mont Blanc pen. The result often can be not only a financial disaster but also the emotional breakdown of people, and even death.

The fact is that, with the economy in turmoil and with no real relief in sight, the potential to be sued on some contractual liability is matched only by exposure to new and complex government regulation, or some novel tort liability. Even getting married may be just too dangerous these days.

So, what are you going to do about it? Sun Tzu, the Chinese general who wrote his book of some 2,500 years ago called “The Art of War,” tells us the greats always set their defense first to put themselves out of the possibility to be defeated.

Businesspeople and investors spend a lot of time, and sometimes a small fortune, trying to manage their financial risks. It makes me wonder why most people have not put the same time and effort into personally planning to survive their legal liability exposures financially.

I can tell you that, after doing this sort of legal consulting for decades, there is no one-size-fits-all wealth protection strategy. The facts, the law, and the specific circumstances of the dysfunctional human activities involved are all variables.

Litigation brings out the worse in people — just like in a real shooting war. There are no guarantees of what will be effective ultimately, so everybody has an opinion on whether planning to keep you financially secure will, in fact, work. I can say with some confidence that you miss 100 percent of all the pitches you don’t swing at.

However, a couple of things are very clear. Planning to protect your assets does not hide assets. Secrecy is largely a myth. What can be known is likely to be known.

Also, this sort of planning endeavor cannot be used to evade taxes. In fact, there is going to be additional tax filings these days under the new tax compliance and reporting regimes.

Having created debtors and creditors in equal numbers, I have no doubt that the Creator loves them equally and alike.

All parties in our legal system also are entitled to their respective full measure of legal rights. Lawsuits are filed to get someone else’s money, and defended to just keep your own.

When all is said and done, litigation is all about the money. As Voltaire, another of my favorite philosophers, once observed, “When it is a question of money, everybody is of the same religion.”

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As I mentioned to Newmax CEO and Editor-in-Chief Chris Ruddy not so long ago over dinner at Abe and Louie s in Boca Raton, Everybody is scared stiff of getting sued. Chris, knowing he was having dinner with me a lawyer, wisely picked up the check, just in case he ever...
Monday, 30 August 2010 10:41 AM
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