I had an interesting lunch yesterday, where I was part of a group of financial advisors to sit in on a presentation on the necessity of Asset Protection Trusts. The presenters were a pair of local experts, one a financial advisor, the other a local attorney who has made creation of these trust strategies the foundation of his practice.
I don't think the people who invited me really thought through the fact that my entire clientele is trial lawyers and personal injury victims, and that I would find highly offensive the sales pitch, which was essentially there is a litigation explosion, trial lawyers are predators and they are going after you, or your clients, personal assets. I could have been a rude guy and attacked the "facts" they tossed out, such as the average employee suit against an employer is $578,000, or that their are 20,000 law suits filed every business day. Lets do the math, 52 weeks, 5 business days, would equal 5.2 million suits per year in civil court. Any trial lawyer, clerk, settlement professional, etc, know that number isn't even close to reality.
I stayed as long as I could handle, then left early before dessert as I really knew I couldn't in good conscience sit there and listen in. However, I did bring their sales material along, and after reading it over I was intrigued by the lengths to which they are scaring medical professionals, small business men and others into expensive and complicated Asset Protection Trusts to protect their assets from, as the speaker said, " The predatory trial lawyers that want to steal your money."
Among the options were options such as Asset Management Limited Partnerships, International Wealth Management Trusts, LLC's, but most fascinating was the option of taking possession of all current and future accounts receivable of a medical practice, buying life insurance, immediate annuities, creating trusts into which money pours, and essentially creating a wall that permanently removes income from a practice. Never mind that I have never, in 25 years of settling cases ever seen a case where a professional corporation or individual had to make a substantial payment on a personal injury case. The point is these guys create the fear it WILL happen, so you need to spend literally hundreds of thousands on insurance and legal protection now, so that they don't take your beach home and Ferrari.
Long story short, the guys pushing this plan make more money in a year selling these solutions then 99% of the trial lawyers I know, so the question becomes, who is really the predators here?