The US is home to more than 75% of the world’s lawyers and 90% of the world’s lawsuits. We’ve all seen those disgusting TV ads urging audience members to file claims and lawsuits.. One in five people in the US will be involved in a lawsuit, and if you own a business or property, your chances greatly increase to one in three.

WHY SO MANY DEMANDS?

Some say it’s because we don’t spay or neuter trial lawyers and that’s why they are ‘overcrowded’.. Others blame the American cultural slant for blaming and pointing fingers at life’s unfair outcomes. Whatever the reason, it makes sense to reduce your risk of being sued and increase the protection to survive one with your financial life intact..

REDUCING YOUR RISK OF LITIGATION.

Most lawsuits involve ‘tort’ claims, i.e. breach of contract, intentional damage or negligence, etc.. If you own rental property, are a business owner, have teen drivers, coach a team, or have accumulated assets, chances are you’re a target.. These are ‘demand magnets’. Consider ways to reduce the likelihood of being in a lawsuit by lowering your lawsuit profile. For example, rental property owners must keep their properties in good repair and safe from hazards.. Business owners should pay attention to customer service and financial disputes, adding arbitration or mediation clauses to contracts to resolve disputes before they escalate into lawsuits.. Above all, consider the “entity layer” with family LLCs and limited partnerships. Ask your insurer, family, and employees to help you with an internal audit of your business and risk management practices to uncover hidden risks and help you design practical mitigation. The saying is true: ‘An ounce of prevention is worth a pound of cure’. me

INCREASE YOUR LIABILITY PROTECTION.

Being proactive to reduce the risk of lawsuits is just one first Steps. The next is to remember that sometimes no matter what you do, you can still be sued.. Most of us believe that we are not likely to be sued because we are good people, try to raise our children well, adhere to our religious beliefs, or try to avoid risky behavior that could harm others.. So what can he do? average person do to increase your level of protection?

Start with proper liability insurance. Ask your agent about the types of claims you are most at risk for, what your policy actually covers, and most importantly, what it does No cover. Look at the size of the jury prizes that are awarded for those risks.

Next, see if a ‘general policy’ can be added to your homeowners coverage. A blanket policy is an inexpensive add-on that could be very useful if (when) you are sued. Some offer million dollar coverage for around $250 to $350 a year. · If you are a ‘sole proprietor’ or ‘joint venture’ business owner, you are walking around with a goal on your back that says ‘Kick me’. Sole proprietors are not only the most tax audited business owners, they are also most at risk. Because the sole proprietorship and the business are considered ‘one and the same’ under the law, you are personally liable and can lose everything.. Consider Forming a Corporation or Limited Liability Company (“LLC”). If your business is already in a corporation or limited liability company, get help making sure you meet ‘compliance’ standards for your business to provide the first layer of protection against future unknown lawsuit predators.. Many trial lawyers try to ‘pierce the corporate veil’ by claiming that companies are not observing corporate formalities or by applying the ‘alter ego’ doctrine, by claiming that you have behaved in such a way that the court should ignore the existence of the corporate entity. the company and make you ‘personally responsible’. To avoid this, don’t mix personal and business expenses.. Observe corporate formalities of board meetings and minutes.. Take reasonable compensation and pay personal expenses with personal funds, not business. Begin developing a step-by-step plan for acquiring trade credit in your own business name, separate from your own personal credit, as this will help your business grow stronger while also reinforcing the case that you and your business are No one and the same. With guidance, you can establish credibility and independent financial power on behalf of your business that will not only create lines of credit for your business to expand, but also reduce the pressure on your personal credit.. If you own rental properties, consider the new ‘Series LLC’. Think of it as a “mothership” of a single entity that allows you to separate assets, liabilities, and accounting for multiple properties, but consolidate them for tax returns.. Another alternative could be a limited partnership as a liability shield.. Bottom line: You have planning options. Some seven states have adopted the ‘Limited Liability Partnership’ (or ‘Triple LP’). In ten years it will probably be national.. Triple LP gives the general partner (manager) the same level of protection enjoyed by limited partners and Nevada has one of the best Triple LP laws in the nation.. Your company must adopt a “qualified” retirement plan, such as a pension or defined benefit plan. Even a sole proprietorship can adopt a self-directed ‘Solo 401(k)’. Current law protects funds within qualified retirement plans from being subject to creditor claims. In the end, protecting yourself from a lawsuit isn’t solved by waving a magic wand or hoping to avoid becoming a target.

Take charge of seeking help establishing a corporation, limited liability company, limited partnership, and qualified retirement plan. Every step you take now to reduce risk and increase your protection is one step closer to enjoying a secure and comfortable retirement, having safeguarded your accumulated wealth..