Stories Can Motivate You to
Become Asset Protected

Have you ever heard the comment that the only clients who buy long-term care insurance are the ones who have had a family member who needed it and didn’t have it?

Why is that? Because they have had a real life experience that motivated them.

The same unfortunately holds true for asset protection planning. Many clients know they need to become asset protected but for some reason can’t motivate themselves to move forward (although it’s also true to state that most clients don’t understand how at risk there assets are or why they need to be protected).

If you’ve been ignoring that little voice that’s been telling you to become asset protected, maybe this newsletter can help.

Story Time

I usually laugh a bit before telling my stories because I always say that “I’ve got some good stories for you.” In fact, the stories are terrible ones, but they are good to “motivate” and that’s what I am trying to do, e.g. motivate readers to do what they should do which is to protect their assets.

Story Number 1—The Teenage Child (my personal favorite)

If you have teenage children, chances are at some point you and your spouse will go out of town and your children will be left at home (the 15-17 year olds). Imagine telling your teenage child on Friday morning that you are going out that evening to see an out-of-town football game or play, and that you won’t be back until sometime after midnight.

What’s going to happen Friday afternoon at school? The teenage child will pass around a note to all of his/her friends telling them that the party tonight is at his/her house because the parents are out of town. The note also says that the party is not “BYOB” because their parents have plenty of alcohol in the house for the teenagers to drink!

Friday 5:00 p.m. comes, and you leave. Who is walking in the back door? Fifty teenagers looking to drink your alcohol and have a good time. What happens when midnight rolls around and everyone is told that the parents (you and your spouse) will be home shortly? The now severely drunk teenagers pile into their cars to drive home.

What happens next? Four of the teenagers who got into their car drove down the road and hit a tree. What kind of injuries do they sustain? The typical outcome is death, but that’s not what happens. Let’s assume they all become quadriplegics.

The first question you need to ask yourself is who is liable? The teenage driver? Sure. But that driver and his parents are poor and have no auto insurance. What about the homeowner where the party was held and whose alcohol was consumed? Absolutely. The homeowner is going to be sued, and the personal injury attorney is going to go after everything the homeowner owns, including their personal residence.

If you think you are protected because you purchased a $1,000,000 umbrella liability policy on your home, how helpful do you think that will be when you are sued for $10,000,000-plus in the above example?

Example 2—Clients who drink and drive

While we all know it is not right to drink and drive, many people do it. This probably rings true for many people with wealth who like to go to dinner and have a bottle of wine. With blood-alcohol legal limits going down each year, it does not take much to be seen as legally drunk in the eyes of the law.

What if you had thee glasses of wine at dinner and while driving home accidentally dropped the cell phone in the middle of a conversation? What if you tried to pick up the cell phone and inadvertently crossed the center line and hit an oncoming car? The damages and lawsuit will be large, but the problem will be compounded because when your blood is taken you will have let’s say a blood alcohol content of .08 (legally drunk).

While the drinking had nothing to do with the crash, you are now a bad actor and the jury verdict will be even higher. ALL of your personal assets are now at risk.

Example 3— Boats, Automobiles, Snowmobiles, Planes, and other toys

I’ve never met a boater or snow mobile rider who didn’t drink. Heck, boating is an excuse to get together with friends to drink. Where do people snowmobile? For the most part, snowmobiling revolves around driving from bar to bar to bar. To do otherwise would be boring.

There are many paralyzing crashes involving boats, wave runners, snowmobiles etc. I know of a family whose son had a friend over to snowmobile on his property and the friend was killed in a snowmobile accident. The family was worth over 20 million dollars and did have $2,000,000 worth of home owners insurance, However, he had to come out of pocket in the amount of $2,000,000 to settle the case for $4,000,000. He was not asset protected.

Summary

The point with this newsletter is not to scare you but simply to motivate you to take a serious look at asset protection planning. My goal is to get your attention so you can be motivated to move forward and do the right thing (protect your assets).

If you would like to have help determining if your assets are at risk to creditors and how to protect those assets, please contact our office to setup a time for us to meet in person or discuss your situation over the phone.

Regards,

Bob J. Baker
Asset Strategies, LLC
www.assetstrategiesonline.com

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© 2008 Asset Strategies, LLC