Contact Us Today! (949) 305-8642


Asset Protection Concerns For Hedge Fund Managers

Posted by James Burns | Sep 22, 2019

We are currently in an economy where people are running scared and are uncertain. I also think there is a jaded perception where we never give thanks or gratitude for what we have and our fear and panic is all about loss of greed which is not useful. This type of environment leads people to always be dissatisfied with services and investments and many will go to the 12 person lotto (jury) via a lawsuit before you know it.

If anyone thinks I'm speculating just go to the web link at the end to review some of the ridiculous lawsuits and you'll know we have become a country of whiners who expect to get paid from someone else based on our mistakes. Every month I go here because unlike much of the legal profession I'm for reducing lawsuit abuse Faces of Lawsuit Abuse.

Since my legal work is more about wealth creation or transfer than wealth deletion, we speak with many of the top financial firms and hedge fund managers. I have found in speaking to these financial professionals that many are concerned with being a victim to either a baseless lawsuit or one that could have been settled between the individuals. In times like this you can never satisfy investors when the market goes down or the investment does not work out as expected. It is difficult to perform your profession while a huge black cloud hangs overhead or you try to sleep after an investment tanks and you know the clients will be calling and accusing you of their financial demise as if you personally made the investment go down.

This is when a high quality and legitimate asset protection plan should be integrated into your overall risk management and personal estate/succession plan. All financial planners who advise clients on risk management owe it to their clients to do what they say and be a product of the product by having a proper estate and asset protection plan.

For clarification, asset protection is the use of risk management tools and legal strategies to preserve a person's wealth so that it is not unfairly confiscated from them in a court proceeding. Because of the litigation lottery where predators go to the 12 person lotto (jury) and other fear and societal norms of solving problems with large pay days in court we see a rise in the abuse of the system and whether you win or not you're a loser because you've had to pay to defend yourself at a cost of time, money and personal unrest.

A recent study of hedge fund professionals revealed that 39.8 percent had been involved in unjust lawsuits or divorce proceedings and 83.3 percent of hedge fund managers had a concern of their own personal wealth derailment through court proceedings. It should be said that it would be very difficult to get a jury of 12 people in this economy that would feel anything but contempt for a hedge fund manager or other wealthy person since they appear filthy rich and easily able to absorb the damages they caused to the poor person who is less fortunate. The case would ready like the quintessential “David meets Goliath” in the eyes of the jury since they are usually comprised of the folks who either don't work or hate work so they are getting paid to be there by their company through a trial.

The cost of being caught with your pants down can be more than embarrassment and in some instances can wipe 0ut all of the hard work that went into building a business of a family legacy. It most attacks against you it might comes as a Pearl Harbor sneak attack or it might be something you knew was coming but failed to realize the gravity and that someone who thinks you've wronged them wants to be vindicated in dollars.

All this can be avoided and what we do every day is help folks incorporate proper tax and risk management strategies into their business, estate and retirement planning because you often do not get a second chance and by the time the complaint is served, it is too late to consider your options to save what you've worked for. I have had many professionals with practices they build up over a 20 year period see the light that it all could be lost if this person was to strike a chord with a group of 12 and take away everything.

I leave you with this thought..

Q: If you have assets when might a good time to protect them be?

A: Right now is the winning answer.

About the Author

James Burns

Estate Planning, Asset Protection, Business and Real Estate Transactions, nutraceutical Law and franchising: