It’s Best To Protect Assets Before You Have A Problem

Barry Siegel urges you to plan ahead

Barry Siegel urges you to plan ahead

By Barry D. Siegel, Esq., The Siegel Law Group, P.A., Boca Raton

Imagine a husband and wife out for a drive on a rainy day, a child runs into the road, and the worst possible thing happens. In addition to the emotional shock and heartbreak, they soon learn that they have been named as defendants in a wrongful death lawsuit.

They call their auto insurance agent to ask how much coverage they have in this case, and are told that coverage is the minimum the state requires, which is $300,000. The insurance agent advises them that the company will assign a defense attorney to defend them.

Some days later they meet with the defense attorney who has requested a complete list of financial assets and liabilities. As they prepare their financial statement they realize what a strong financial position they are in. They have a mortgage-free residence valued at $300,000, a $400,000 IRA, $875,000 in stocks and bonds, and $275,000 in cash accounts. Frankly, most couples in their 50s would feel quite secure with a net worth of $1,850,000 and several years to earn prior to their planned retirement.

Two days later they receive a complaint from the attorney for the child’s parents claiming damages of $5,000,000. They forward the complaint to their attorney and he advises them that, if they proceed to trial, they are quite likely to lose.

He suggests that they might want to engage in some planning to protect what they can, but because the lawsuit has occurred, there is little that can be done to protect assets. They are forced to hire a bankruptcy attorney to determine how much of their property can be protected from the $5,000,000 lawsuit by filing for bankruptcy. The bankruptcy attorney requests a $25,000 retainer.

It dawns on them that they had considered a meeting with their estate planning attorney to discuss asset protection, but decided that they were protected with their insurance coverage and didn’t really have time for a meeting.

Unfortunately, scenarios like this occur every day in America; and once you have a legal problem it’s too late to do asset protection planning. It’s like trying to buy insurance for your boat while it’s sinking in the midst of a storm. Planning has to be completed when the skies are clear, and before anyone has any possible claim on your assets.

The Siegel Law Group is based in Boca Raton and has practice specialties in Estate Planning, Elder Law, Tax Planning, and Asset Protection. For more information, contact Mr. Siegel at 561 955-8515 or bsiegel@siegelestateplanning.com.