People ask if they are guaranteed not to lose a single dollar if they invest in an asset protection plan. While that would be a nice guarantee, it is not how asset protection planning works. Your assets will be more protected from loss with a plan in place. Listen in to see what kind of guarantee you can get and how asset protection works with the threat of a lawsuit.
Colin Ley is an asset protection attorney and the creator of the PREP Trust® and Better LLC™. He is also the co-founder of LayRoots (along with with partner in life & business – Shreya Ley)
Being successful in America makes you a target for bogus lawsuits from shameless lawyers. We created an effective, asset protection solution, so you don’t have to worry anymore, happily knowing your family’s future is protected. Get started now by scheduling a free, 30-minute call at livemorecarefree.com.
Colin: Howdy folks Colin and Shreya Ley here from LayRoots, which is an amazing asset protection law firm, where we help people protect themselves from stupid lawsuits. Recently, Shreya we got a number of questions. That’s right there on the little screen. “Am I guaranteed not to lose a single dollar? If I set up an asset protection plan?”
and so we thought it’d be fun to talk about. When answering that question, so the person has no plan set up. Right? So you got your,
Shreya: so generally when people call us to ask, they have no planning done.
Colin: So starting from there, you have a.
0% chance of having your assets protected in the event of a lawsuit
or a 100% chance of losing some assets.
Okay. For that a hundred percent chance. We cannot guarantee that you won’t lose any assets, but can pretty much guarantee you’re going to be better off with an asset protection plan. Because the point of an asset protection plan is not for you to just throw up a couple of middle fingers to whatever lawyer comes after you and just ignore everything they do.
And, they get a judgment against you and you just, you don’t even get to pay attention to it. And somehow you won’t lose any assets. That is not a good way to approach things. The point of an asset protection plan is to give you the leverage so that you can make a lawsuit, either one not happen in the first place, or go away.
And settle for, as they say pennies on the dollar,
Shreya: Right! So many people will before they Sue a person, they might do an asset search and see if it’s even worthwhile to Sue them. And so if you have an asset protection plan in place, you become a much less attractive target. And so the idea is that the lawsuit won’t happen in the first place.
They’ll say, well, it’s much easier to just take what insurance is going to give us, instead of attempting to Sue this person who doesn’t have anything to take. So there is that aspect of it. Then there’s also the idea that if they do go forward with that lawsuit, you can use the fact that it will be much, much harder for them to collect anything as a way to negotiate.
Colin: Absolutely. Sure. Yeah, I wasn’t cutting you off. I was just getting ready to go taking my breath. We thought it would be useful to highlight a case that we experienced last couple of years or so. It was, our client was a business owner who was ending a lease on a building. They were getting out of the deal.
The other person on the deal was not happy and basically was threatening to Sue them for this, that, and the other thing. And they were
Shreya: The main asset. The most attractive asset that this person had was a fully paid off house on the west coast.
Colin: So this person, they were demanding, something over a million dollars.
Shreya: Yeah. Something crazy. It was actually it, yeah. It was like millions of dollars. It was money. Yeah. Seven figures.
Colin: Yeah. And so the person knew that our client had a house like Shreya was saying it was paid off. It’s worth about a million dollars. He had about $250k in non-protected investment funds like a brokerage account.
Okay. This person was obviously upset at the thought of losing this home and these other assets and the attorney for the other side, they knew that they, they could get ’em.
Shreya: Yeah. They were kind of trying to take advantage. They were like this person obviously loves their home, who doesn’t love their home and it’s going to want to protect it.
And we’re going to try and put the screws to them by threatening this.
Colin: Yeah. So this client set up and asset protection trust, put the house into the trust and went back to the negotiating table and said, Hey, my house is in this trust. Even though it was kind of late planning, but it was still very effective.
The, our client was able to then settle this dispute for $10,000. So they went from, the risk of, of losing that home. You know, the investment account and they were able to settle for $10,000.
Shreya: That’s a win, that’s a win in my
Colin: 10,000 boom. Right. And so that is the point of the planning, right?
This asset protection planning. If he had approached it from this, if I’m not going to lose, if I’m going to lose any amount of. I don’t want to do this planning and they lost $10,000 and altogether they put in about $20,000 to set up this plan and then settlement that’s $30,000. So for $30,000, they saved, $1.25 million.
Shreya: And not to mention tons of time and effort in going through with a lawsuit and having to deal with the headache and emotional toll that that takes as well as the money.
Colin: You can’t put a value on that but those are what the numbers look like. You know, this guy was going to lose. He could very easily lose over a million dollars instead they lost $10,000 and moved on with their life.
And that is winning in asset protection. Yes. Cool. Thanks Shreya. Thanks for watching. And we’ll see you the next time.