A Special Report by
John V. Childers, Attorney at Law
This special report is focused on one of the most rapidly growing fields in America today, the area of asset protection. This may sound strange for you to hear because you may not yet be familiar with the topic. As a matter of fact, you may have some of the same questions that I hear from people throughout the country when I speak to them on this important subject. Many of those questions are as follows: What is asset protection? Why would I need asset protection if I don’t break the law? I’m not a criminal and only criminals need to hide their assets! I don’t have millions of dollars or anything of immense value worth suing for! I don’t have that many debts and the few I do have are manageable! I don’t have to worry about asset protection until I make at least two or three times as much money as I currently earn. If I get into a bad situation, then I can just transfer my assets to someone else, right? Wrong.
You see, I meet many, many people who have these misconceptions about what asset protection is, who needs it and how you go about establishing an asset protection plan and creating your own financial fortress. The first thing we need to do is to explain exactly what asset protection is and why it’s important to you. This special report will help you to understand the problems we face in today’s litigious society as well as introduce you to a simple process that you can go through to properly defend yourself. Let’s take a look at exactly what the field of asset protection is all about.
In the area of asset protection, it is really important for you to understand what a litigious society we live in. That means, in plain language, that a lot of folks are suing a lot of other folks, and often for very frivolous reasons.
The best way to illustrate this is by taking a look at a few key statistics on lawsuits. Actual numbers will usually open your eyes to something that you really need to take to heart. The following statistics should do just that.
Studies show that a new lawsuit is filed in this country every thirty seconds on average. That’s two a minute, people! To make this point hit home, think about what that really means. In the short time that it’s taken you to read this special report, several lawsuits have already been filed somewhere against somebody. Lives have been changed, forever! Financial pictures have been altered, irrevocably. Entire family futures have been put in jeopardy. The worst part of this is that it could often be avoided by taking a few simple steps. But that is just the beginning.
One out of four people will be sued this year in this country. Even worse, the average number of lawsuits over an individual’s lifetime is five, and of these five, one will be what is known as a “devastating” lawsuit. The term devastating means that it wipes someone out completely, costing them everything they own. It’s a horrible sight to see somebody ruined by this kind of litigation, but it does happen. By studying this special report, as well as taking advantage of the various educational materials in the Secret Millionaire series available at www.secretmillionaire.com, you can go a long way toward making sure it does not happen to you.
As you can begin to see, rampant litigation is a big problem in this country. Everyone needs to learn what can be done to help eliminate this problem.
This becomes particularly important when you consider that of all the lawsuits filed in the entire world, ninety-four percent are filed right here in the good old United States. Ninety-four percent! We’re the world’s leader in filing lawsuits. Now, I don’t know about you, but that’s not an area I would prefer to lead the world in.
Combine these statistics with the fact that there are currently more law students in law school than there are practicing attorneys and it becomes downright scary, doesn’t it? Why is that? Why are law degrees in such high demand these days? Is it because we have a shortage of lawyers in this country? I don’t think so!
Flip through your telephone book and see how many attorneys there are in your area alone. There is certainly no lack of membership in the legal profession. The number of lawyers is constantly growing, not because there is a larger need, but because there is more opportunity out there for someone to file and win a lawsuit.
With this in mind, which way do you think the number of lawsuits is going in this country, up or down? Up, up, up, of course! Now more than ever, asset protection needs to become a central concern in your financial planning. You absolutely must have a plan to protect your assets, and the use of legal entities should be an essential element in that plan. As such, you absolutely must implement your own financial fortress. This will function as a security system for your assets. Now that we’ve identified the problem, let’s take a brief look at a simple six-step process for implementing your financial fortress plan.
As we begin to delve into our six-step process, it’s important to remember that asset protection is an ongoing process. One simple act today will not necessarily solve your problems for the long run. However, taking that first step can put you well on your way toward securing your assets. The implementation of your asset protection plan must be accomplished in a systematic way with specific goals in mind. I like to play with acronyms. They help me keep in focus what I am trying to accomplish. I figure that if I can remember something, the chances are greater that I’ll implement it. I hope that this will affect you in the same way.
Basically, asset protection is the process of defending your assets. Therefore, we will use the acronym DEFEND in order to help establish and illustrate this six-step process. The process is as follows:
1. Define your goals 2. Engage professional assistance 3. Forethought 4. Education 5. Never stop learning 6. Decide to implement
Now that I’ve outlined the various steps in this process, let’s take a look at these a little closer. By following these six simple steps, you can build a veritable financial fortress for protecting your assets.
Step One: Define your goals
Before you can implement any strategy, you have to know what you are trying to implement. Thus, you must define your goals. You must know what you wish to accomplish. The first step in asset protection would be to determine what your financial makeup is. These include topics such as:
· What are your sources of income? · What are your current assets? · What are your current liabilities? · What are your estimated future assets? · What areas of personal liability are you concerned with the most? · What areas of personal liability have you not thought of yet? · What assets would you not want to lose in a lawsuit? · What is your asset protection plan going to accomplish?
Once you have a clear understanding of the many assets you have at risk, you can better understand what type of strategy needs to be put in place.
Step Two: Engage professional assistance
Once you decide asset protection is for you, the next step is to find experts in this field. Most assets protection strategies involve very professional and legal concepts that require the use of an attorney, CPA, financial planner, or all three.
More Americans use CPAs on a routine basis than they do attorneys. The reason for this is that taxes must be filed every year. Tax planning is an ongoing concern. Hence, CPAs are often the first professionals consulted when it comes to a more complex strategy with regards to your financial portfolio. This is where we come to an important distinction between the legal world and the accounting world. You see, accountants have their expertise in taxes or financial statements. They are not involved in the practice of law every day. If you were to ask your CPA, “At what point should I incorporate my small business?” He or she might very well answer, “Once your net income reaches $50,000. Until then, you would not get much of a tax benefit by incorporating.” The fact is, this is a very good answer from the tax standpoint. It does not address, however, any legal benefits involved with incorporating. Is incorporating a small business worthwhile if it only protects your home and other personal possessions from potential creditors? Absolutely. It is possible that incorporating a small business may only give minimal tax advantages, however, the legal benefits involved should make incorporating a top priority.
Conversely, not all attorneys are experts on asset protection, either. Sure, they had to memorize the law of corporations for a short while when they took the bar exam, but not all attorneys practice in the area of business entities and asset protection. There are divorce attorneys, personal injury attorneys, trial attorneys, intellectual property attorneys, and many, many more. They may come into contact with the formation of a corporation or LLC about as often as you do.
My point here is not to bad-mouth the accounting or legal profession. My point is to make you aware that just because a person may have a few letters behind their last name, they are not automatically experts in all fields of business.
This being said, it is important that you seek out professionals who are knowledgeable and experienced in this field. If at all possible, it is important to find someone who deals primarily in the subject matter that you are interested in. The strategies and plans they can help you implement can be worth far more than the cost of their services. Besides that, these services are oftentimes deductible thereby protecting your assets from taxes.
Step Three: Forethought
Never is the phrase “hindsight is 20-20″ more applicable than in the area of asset protection. It is easy to realize the value of proper planning once you are involved in a lawsuit. The problem however, is that once an incident occurs and you have been sued, it is too late to re-arrange your affairs to shield your assets from creditors.
A proper asset protection strategy starts with the fundamental belief that you will be sued in your lifetime. Approaching your plan with this attitude will make you search for every advantage you can find. Professional football players practice plays and techniques daily that they may never use in games. Their goal is to have enough sound offensive plays and defensive techniques that they feel extremely confident about their ability to compete and win. In the same way, you will feel confident and secure about your asset protection strategy, even if you never have to use it. Many times, would-be creditors will not even challenge you with a frivolous lawsuit once their contingency-fee based attorneys realize the impenetrable defense you have implemented.
It is also important to remember that asset protection involves assets and income you have not even accumulated yet. It is human nature to improve your standard of living as you mature and become older. Salaries tend to go up. Business opportunities are presented to you. Other family members pass on and leave assets to you. There are hundreds of ways for your net worth to increase as you get older. Your family may also increase in size with a marriage or children. My point here is to realize that just because you think you are O.K. now, you may not think that way tomorrow.
Step Four: Education
Education is the process by which you learn and become familiar with a wide variety of asset protection strategies. I often find that people become enthralled with my seminars, audio/video tapes, and books. When I speak to a group of people, I have to set limits on question and answer sessions. You see, people get excited when they are presented ideas and techniques that are cutting edge. They just cannot seem to get enough of it. Ironically, most of these people did not realize the degree to which they would get involved when they started.
Education on topics as complex as these cannot be attained by reading one book, attending one seminar, etc. For instance, this special report only covers the very basic asset protection planning process. It is intended to get you excited and thinking about the many opportunities available to you to help protect yourself and your loved ones. If you think you have all the answers after you have finished this report, think again. This report would serve as step one in your education process.
Education can be attained in many ways. The most obvious is research. However, research on your part involves many hours of wandering and wondering where to start or where to go next. The good thing about nerds and bookworms like me is that I have already done some of your research for you. I put on seminars around the country where I teach the complex and cutting edge strategies that are touched on in this report. I have audio/video tapes which cover these amazing techniques in more detail. I even have a web site devoted to teaching individuals the art of being a Secret Millionaire http://www.secretmillionaire.com
Where do you think I come up with this stuff? They only teach you so much in law school. The truth is, I spend my spare time attending seminars others put on. This is tax deductible, of course. I read books that others have written. I listen and watch other tapes that people have made. I constantly strive to remain as current as possible on the strategies that protect our lives. You need to do the same. The great thing is that you can take advantage of my experience through my educational products such as this report.
Step Five: Never stop learning
It is important to remember that education is an on-going process. As mentioned earlier, there is no way to learn all there is to know about asset protection by reading one book or attending one seminar. In the same way, once a strategy is implemented it must be constantly monitored to see if there are better alternatives or if situations have changed. Remember, we are dealing with legal and tax laws. When is the last time that you heard of a law changing? Probably last week. We live in a society that is constantly changing and on the go. Like it or not, we have to stay on top of these changes in order to best secure what we have accumulated for future generations.
Let’s say you took your attorney’s advice and formed a corporation. You now have begun to implement your asset protection strategy. However, you have only just started to learn all there is to know about corporations. You need to know how they work, how they are taxed, how money goes in, how money goes out, what forms you have to file, what paperwork is required of you, etc. True learning is realizing there is more you need to know. More knowledge opens more questions. Learning is a never-ending process. But it is a process that can make the difference between someone who is able to retain and build their assets and someone who loses it all.
Step Six: Decide to implement
The last, and most important, step in the asset protection implementation process is to do it. You can have all of the goals, professional help, forethought, and education you need, but if you haven’t decided to start your plan, it does you no good. A judge will not grant you leniency because you were “thinking about incorporating.”
Needless to say, if I have not convinced each and every one of you that lawsuits in this country are out of control and are only going to get worse, then I have not adequately done my job. Do you realize that it is more likely for you to be struck by lightning twice during your lifetime than to live your life without being sued? Think about it. The small cost of protecting yourself and your loved ones is definitely worth the comfort and security implementing these strategies will bring. The key is implementation.
Time to Take Action
Now that you’ve learned the steps necessary to implement your asset protection plan, it’s time to take action. Robert Allen and Multiple Streams of Income LLC have teamed up with Profit Publishing Group, Inc. to offer the best services available for accomplishing your key asset protection planning objectives. You need to get these things taken care of as soon as possible. Profit Publishing Group, Inc., through its Secret Millionaire series, can help you do it. For more information on how to get things properly structured, visit their web site at www.secretmillionaire.com. The time is now to begin taking control over your situation before your situation takes control over you!
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