How to Handle Frivolous Lawsuits

A frivolous lawsuit is one in that has no legal merit and, therefore, has no chance of actually succeeding.  A frivolous lawsuit is often filed with the intention of harassing, annoying, or disturbing the other party in question. In some cases, the lawsuit is filed to limit the collection and/or foreclosure proceedings on an outstanding debt as a possible strategy to settle the case for less.

Litigious people will threaten to sue for petty reasons, such as being unsatisfied with a product or because they’re holding a personal grudge against another party. These types of cases can have taken up valuable court time and resources and can have a negative impact on the lives of the individuals being sued.

Unfortunately, threats of these types of lawsuits are becoming more common in today’s society, and there are many people who a have a “lawsuit history” when it comes to frivolous litigation.

Business owners and wealthy individuals are often the targets of frivolous lawsuits because they have “deep pockets” and knowing this, the plaintiffs and their lawyers are counting on a settlement rather than drawn out litigation.

Avoiding Them in the First Place

While having money may certainly improve the quality of your life, it can also have its share of problems.  Your odds of being the target of a frivolous lawsuit increase, and there are people who will use any and every opportunity to get a “piece of your pie” by filing a frivolous lawsuit against you.

According to the 2014 ACE Private Risk Services Survey on Personal Liability Perceptions and Behavior Among Wealthy Households, more than two-thirds of the high net worth community believe that the public’s perception of the wealthy makes them at risk for lawsuits. But, when asked what their greatest concern is with respect to being sued, the respondents seemed to be less concerned about losing a significant amount of their assets vs the stress and time involved in mounting a legal defense.

When it comes to avoiding frivolous lawsuits, comprehensive estate planning can protect your assets and leave you less vulnerable to scams and fraud. A comprehensive estate plan involves conventional estate planning structures to maximize the amount of assets that you can pass on after your death.  But it also includes effective asset protection structures to protect your wealth from potentially devastating lawsuits.

Asset protection strategies that allow you to control your wealth may include:

  • Limited partnerships
  • Limited liability companies
  • Foreign asset protection trusts
  • A Private Retirement Plan (for California residents)

Protecting Your Interests

Whether you’re a business owner or a wealthy individual, without proper asset protection strategies as part of your comprehensive estate plan, you’re increasing the risk of losing everything to frivolous lawsuits.

Asset protection is all about planning in advance for that unforeseen, catastrophic lawsuit. At the Jeffrey M. Verdon Law Group, our goal is to protect your family, your legacy, and your assets from a frivolous legal attack. Take our online risk exposure test to determine whether asset protection and privacy is beneficial for you.

Posted in Asset Protection, Estate Planning, Updates.