Are you one of those people who believe that money can’t buy happiness? Do you think that your status in life doesn’t depend on your level of wealth? Are you a firm believer that the money isn’t important -- but how you play the game is? Do you think that being a good loser is as important as being a good winner?
If so, then skip this. Go read something else.
In this tumultuous world, having money is more important than ever. And one of the biggest risks to financial survivability is losing it all in a lawsuit.
What can I advise a client who is scared stiff of being sued? Certainly not that he or she can confidently rely on the integrity of the lawyers and intelligence of courts. Most of the people I talk to have been through a divorce and know firsthand that the legal system can be quite despicable.
Most often, my work, like that of many of my colleagues, is the legal version of a MASH unit. Hawkeye Pierce would be proud of us. We help clients who are hemorrhaging money because they didn’t take preventive steps to protect themselves, their businesses and their loved ones.
But it is real difficult to stop the bleeding once it starts.
Maybe I am preaching to the choir. But it seems to me that most businesspeople or investors haven’t gotten the message. Or they haven’t done much about it.
Paul Campus, who wrote “Jurismania” (The Madness of American Law), asserted that the American legal system exhibits all the symptoms of a serious mental illness. The list of books critical of the legal system is nearly overwhelming as are the myriad of legal joke books.
Question: How do you know that God, who created the world out of chaos and darkness, is a lawyer?
Answer: Because He made chaos and darkness first.
It is impossible to catalog all the areas of endeavor that can quickly turn to becoming a legal crisis.
Are you the guarantor on any loans? Leases? Trustee of a pension plan? A director or officer of any company that pays taxes or has some governmental regulation?
Do you have any employees? How about teenagers who drive cars? Did I mention marriage? Business partners? Investors? The litigation industry has basically figured out how to sue for anything that you do — and for most of things that you don’t do.
What is the most basic step that anyone can take to protect their wealth?
Without question, the first and most important step is to make sure you have money set aside to pay a lawyer to defend you. The law profession, like another even more ancient profession, is coin operated.
Lawyers and emergency room doctors can do some remarkable things even in very difficult circumstances. But it is so much better to prevent a crisis rather than have to overcome one.
The difficulty in preventive legal planning is that so much of what can happen is currently unknown, unintended or unexpected. But such events generally can be anticipated if someone takes the time to look for the potential risks.
You do not expect to have an automobile accident, but you buy a car with airbags, put on your seatbelt when you drive and have insurance.
A legal audit is also part of the risk-management analysis. Looking at someone’s personal, business, or investment life, in a way not addressed in a typical financial, estate or tax-planning process.
I explain it as the legal version of attaining a return of the principle before planning on the return on the principle.
Good investment analysis starts with getting good investment information. To keep that money safe from the ravages of the legal system, begin with a legal audit.
© 2013 Moneynews. All rights reserved.