Paul Deloughery - Magellan Law - May 2019

MAGELLAN LAW PROTECTOR

602-443-4888 MagellanLawFirm.com

MAY 2019

3 BIG MISCONCEPTIONS THAT LEAVE PEOPLE EXPOSED TO FINANCIAL LOSS

I f you caught last month’s edition, you know I’ve decided to dedicate this newsletter to exposing the various “shiny objects” sold to people that just don’t work. To continue exposing myths in the industry, this month, I’d like to address three of the most commonly held beliefs about asset protection that often leave people exposed to financial loss. INSURANCE CAN BE USED AS A CURE-ALL TO PROTECT WEALTH Most people don’t realize that insurance is only one part of an asset protection plan; it also includes smart contracts and legal entities. While securing solid insurance protection is imperative, you must remember that insurance companies are out to make a profit and will try to use any means necessary to avoid a payout. “Ensuring that you have a robust plan that sidesteps widespread, incorrect asset protection notions ... is the best way to shield your accumulated assets and wealth.” For example, one of these means is through exclusions written into insurance contracts that set limits on when the insurance company is responsible when something goes awry. ASSET PROTECTION MISCONCEPTION NO. 1:

ASSET PROTECTION MISCONCEPTION NO. 2: A PROTECTION PLAN CAN BE ARRANGED AT A LATER DATE A great number of people push setting up an asset protection plan to the proverbial back burner, often leaving it there until it’s too late. While this is easy to do, delaying the process can be particularly detrimental to someone who waits until after a lawsuit has been filed against them, since it is illegal to transfer assets after legal action has been taken against someone.

For example, during a lawsuit, if the other side can prove that you billed personal expenses to a business account, your business assets will be exposed to the person filing the suit. Ensuring that you have a robust plan that sidesteps widespread, incorrect asset protection notions, like the three mentioned above, is the best way to shield your accumulated assets and wealth. If you have questions about creating a plan that won’t leave you exposed to financial loss, don’t hesitate to give me a call today!

The best course of action is to get in touch with a professional way before a lawsuit comes along, as having a thorough protection strategy in place could help save thousands — even millions — in the case of a lawsuit.

ASSET PROTECTION MISCONCEPTION NO. 3:

ASSETS ARE PROTECTED VIA LEGAL ENTITIES LIKE LLCS, TRUSTS, AND CORPORATIONS The process of forming a legal entity comes with its own set of rules that, if broken, could equate to a world of trouble in the case of a lawsuit. For instance, if you’ve formed an LLC, you need to ensure that you keep business and personal transactions separate.

–Paul Deloughery, Esq.

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