It goes without saying that if your client loses all his wealth, then you lose too.
For that reason, financial advisors should not be indifferent to actions clients can take to legally safeguard their wealth, says asset protection attorney Hillel Presser, (left).
“There are over a hundred million lawsuits every year. One in three people will be sued in the next 12 months. The average person and business is sued five times over a life time,” Presser says in an interview with AdvisorOne.
The principal of the Presser Law Firm, a national practice based in Deerfield Beach, Fla., says the frequency of lawsuits is also on the rise.
“Here’s the deal,” he says. “It’s a bad economy. A lot of people are losing their jobs. The people lucky enough to keep their jobs are making less money. Why not sue somebody? You can hire a lawyer on contingency and if you win it’s usually tax-free money.”
“Welcome to America,” he adds sardonically. Not just the quantity but the absurdity of today’s lawsuits is enough to inspire thoughts of asset protection. He cites the example of a man who struck and killed a teenager with his luxury car and then sued the victim’s family for damage to the bumper.
Presser tells of another case where someone damaged his car hitting a deer crossing the road. The driver sued the state because the deer did not cross at the place of the deer-crossing sign.
Defendants, whether private or governmental, often find that it’s just more cost-effective to settle such cases in order to avoid paying astronomical legal fees.
To avoid such unpleasantness, Presser says you’ve got to be proactive. “No one gets up in the morning and expects to get sued. You can’t buy health insurance after you get sick and you can’t buy auto insurance after you get into a car accident,” he says.
The solution, he says, is to own nothing but control everything, and he argues that financial advisors can play a key role by educating themselves on what can be done to protect client assets from a financial and legal standpoint.
The first step for an advisor is to refer the client to a capable asset protection attorney. This is not to be confused with a trust or estate attorney he says.
“An estate attorney deals with what’s going to happen when you die. We talk about making sure that what you have now is protected,” Presser says. There might be a thousand estate attorneys in a city, but there may be 10 to 15 asset protection attorneys in the country, Presser says.