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Today, we continue part four of our Asset Protection Planning for Mere Mortals series. Part one, I laid out for you a very broad overview of asset protection planning, encourage you to consider the assets that are important to you and define the risks that those assets face, and then consider protection strategies very broadly.

In part two, we talked about the morality and legality of asset protection planning, specifically here referring to financial assets and engaging in legal planning to make it harder for a creditor to collect against you. And I defended the idea that it is both legal and moral for you to make your assets hard to seize.

And in episode part three of this series, I laid out for you the problem that we're protecting against. And the summary thesis of that show was simply it's not good enough for you to expect to be a prudent and careful person and think that you'll be okay if you're just a prudent, careful person.

It's not good enough for you to simply trust the court system and say, "Well, if I'm wrong, "I don't mind paying for the things that I've gotten wrong, "and I can just trust that the judge and the jury, "if there's a jury involved, "they'll work out the details and I don't mind." It's not good enough.

In today's world, that simply is, it's a fantasy to believe that you can just simply be prudent and that the courts will find justice. That's a fantasy. And so I sought to make that claim in part three. Today in part four, I'm going to talk to you about the overall litigation process to explain to you how the process works so that you understand the legalities involved in the process of litigation.

The majority of asset protection planning that we're concerned about will involve a legal case. That's because in the United States, we're dealing in a society that's largely driven by rule of law. We're not so much concerned about somebody sneaking into your house, putting a gun to your head, and forcing you to open up your safe.

That is a component of asset protection planning, and you should plan for that. But when I use the term, the understood common meaning of the term is not what kind of security system do you install around your compound? It's the common meaning of the term is, how do you protect it so that the person that you ran into at a stop sign and hurt their neck, how do you protect so that they don't take all your money?

Because you slipped and pressed the gas when you were supposed to press the brakes. And so usually we're dealing here with a legal process. The legal process will be looked over and run by the judge, by a court system, and the process is fairly laid out. But this is a process that is generally opaque to most of us.

For most of us, the first time that we come in contact with somebody who is seeking to take all of our money because they believe that we have wronged them is when the lawsuit is served, or when we first get an inkling of it. And that's the first time we're ever aware of how this legal process works.

So I wanna explain it to you so that you understand it, and so that you can do the planning now that needs to be done in order to protect your assets. The first thing you need to hear very loud and clear in the beginning of today's show is, you must, in order for asset protection planning to be maximally effective, you must put in place the strategies that will shelter and protect your assets before anything happens that could lead somebody to file a claim against you or to bring a lawsuit against you.

You need to actually put the structures in place before the facts occur. In the United States, and in most countries around the world or most listeners are based, there is a body of law that comes under the, label, heading, the heading of fraudulent transfer law or fraudulent conveyance law.

Depending on what state you are in, it'll be referred to slightly different, but let's just call it the fraudulent transfer law. Fraudulent transfer law goes a long way back. And the simple idea is this. If I owe you money, let's say I owe you $1,000, and all I have is $1,000, I can't go over to my buddy on the backside of my house and say, "Hey, here neighbor, here's $1,000." And then when you come looking for your $1,000, I had to say, "I don't have it." And then you're just left empty-handed.

Meanwhile, a week later, after you've gone on your way, I'll go back to my neighbor and say, "Hey buddy, how about sending me back over the 1,000 bucks and hey, here's $100 for your trouble." It simply can't do that. And so the US courts are empowered to protect against that.

And judges have massive powers to make sure that a creditor is protected against you fraudulently taking the creditor's money and giving it somewhere else, trying to spend it yourself, wasting an asset or transferring an asset to somebody else. Now we can study this law, and I think I'll do an entire segment on it because you need to understand how it works and it's fairly well codified so that you can understand how to put it in place.

But the key fact that most people miss in this planning is simply this. When we are trying to analyze any kind of fraudulent transfer, fraudulent conveyance, a person's or a claimant's creditor status occurs at the time that the facts occur, the facts that actually lead to the claim, not when the claim is asserted or the lawsuit is initiated.

So pretend for a moment that I drive into you at a stop sign. You're sitting at a stop sign, minding your own business. I'm staring down at my phone, texting, and I drive into the back of your car and you hurt your neck. I can't go home after that accident and immediately start moving money and expect at that point in time that those transfers will be protected because you haven't sued me yet.

It's the actual facts and the time that they occur that makes the difference on assets I can transfer. If a day before the accident, I happened to give my brother $100,000, and then the accident happens, and then all of a sudden we find out that, wow, that would actually turned out pretty well because you would have gotten that $100,000 out of me in court.

Well, it's immaterial. It happened before the facts. But if the day after the accident occurs, I give my brother $100,000, now we have a serious problem 'cause a judge will reverse that transfer and a judge will force me to get the $100,000 back and to give it to you if, assuming in the end, that you win your lawsuit against me and I owe you $100,000.

The Fraudulent Transfer Act covers the transfers and it's based upon the time that the facts occur, not when a case is filed. So you can't just sit around and say, well, I'll wait for a lawsuit or I'll wait and see what happens. You have to act today. Hope that's clear.

Keep it in mind. Asset protection planning is one of the things that you have to do far in advance of ever needing it in order for it to be maximally effective. So what actually happens in a lawsuit? How does the actual process work between certain facts occurring, the company manufacturing and selling the faulty product, the surgeon slipping and botching a surgery, the individual walking down the street or driving their car and accidentally running somebody over, running over a child?

Well, how does this process work between the time of the incident occurring and you actually forking over your money to the person who wins a lawsuit against you? Well, we begin rather obviously with a situation occurring, the facts, the certain events happening, whatever those events are. And in the wake of those events, the person involved in those events or the people involved or the company involved will do an analysis of those events.

And at some point in time, they'll think, hey, you know what? I have a legal case here. I'm gonna sue so-and-so for wronging me. I'm gonna sue this company for wronging me. And at that point in time, they will start to do an economic analysis of the case. Let's start with the simplest form of economic analysis, wherein a plaintiff, the person who's bringing the lawsuit, a plaintiff or a potential plaintiff is simply going to hire an attorney.

You come into my place of business and you wrong me in some way. And I say, I'm gonna sue you. I go to my attorney that I work with and I say to this attorney, we're gonna sue this person over here. And I just want you to sue them for this reason, such and such, and I'll just simply pay your fees.

Well, this is called an hourly fee basis of hiring an attorney. And many attorneys, most attorneys will work this way. You pay them a stated hourly fee for their work. They will bill you. They'll bill you for their time. They'll bill you for their paralegals' time. They'll bill you for their costs incurred.

Those bills will range usually from a few hundred dollars an hour at the lowest to several thousand dollars an hour for the highest and highest priced attorneys out there. Well, in this situation, I'm going to have to search my budget and decide how much am I willing to pay this attorney in fees, especially given the likelihood of winning a case or of achieving a settlement, basically of getting money out of you.

How much am I willing to pay? Now, there are some people who will use attorneys as part of an overall business strategy. That's beyond the scope of what we're doing today. Let's assume people are pragmatic. The most important thing to recognize is when somebody is simply paying hourly fees to their legal counsel, they're going to be thinking about what am I actually gonna get out of this?

Consider it like this. You drive a nice, fancy car, and your car is parked in the parking lot outside your work. And the local bum, pushing their shopping cart full of all their possessions, comes into that parking lot and mistakenly scratches your car and messes it up. Somehow the wind is a gust of wind and it blows the whole heavy shopping cart into the side of your car and makes a nice big dent.

You rush out furious and say, "Listen, bum, you messed up my car." And the bum says, "Sorry," and grabs the cart and shuffles away. Now, compare that to, you know, wealthy person driving a fancy car, pulls into the car, accidentally backs into your car and causes problems. The bum, you're not gonna be very incentivized.

What are you gonna do, chase them down and take their shopping cart and list it on eBay so that you can come up with 32 cents to try to paint your car? It's absurd. They don't have money, and so you're not gonna pursue that very far. But you would pursue your claim against the wealthy person who's driving a nice car, you would pursue it until you're satisfied, until your car is made right.

You would pursue it, of course, informally, in that silly little case I made up. You would pursue it informally. You might pursue it through the insurance company, but if nothing happened, you might be even willing to pursue it in a court of law, take it to small claims court and say, "Listen, this guy backed into my car, and he needs to make it right and fix it." So you, as a person, you will do an analysis, an economic analysis, and decide how much am I willing to pay this particular attorney.

Now, the other way that attorneys take on clients is with what's called a contingency fee. And in a contingency fee, the attorney is not going to charge you by the hour. Rather, they're going to specify a fee that's based upon a percentage of any money they can recover for you.

Usually that's perhaps a third of the money the case settled before trial, and about 40% if it goes to trial, something like that. So now the attorney is involved. And since usually only large companies or very wealthy people can actually afford to pay an attorney on an hourly basis, most of the types of lawsuits that you and I might be subject to are going to be handled on a contingency fee.

Now, in this case, the plaintiff, the person who has the actual fact that they're concerned with, will take those facts to an attorney and will lay them out for the attorney. And the attorney is going to be involved in the economic analysis. Because the attorney is going to front the money, and the attorney is going to front all the money for the depositions, the legal costs, et cetera, all along the way.

And they're going to invest many hours of their time hoping for the big payoff. And so they're first going to analyze the case to see does the case have merit? And is there some way I can help the case to have merit? Is there some way that I can create a case here that I think will stick, that based upon the facts, as they've actually occurred, that will help me to actually win the ultimate judgment?

And of course, the attorney might investigate those facts. They might investigate, hire somebody, do some initial investigation to figure it out. But the attorney is also going to engage an economic analysis. And they're going to try to figure out what's in it for me. How am I going to make this thing work out?

In order for the case to work out, the attorney and the plaintiff have to find somebody who might actually be able to pay. You might desperately want the bum with the shopping cart to fix your car. Sorry, the bum's not going to do it. They don't have the money.

And so legal cases are much like that. Somebody might want economic satisfaction for the wrong that they have suffered. But unless they can find somebody with money, there's a good chance that's not going to happen. And so it's very likely that the attorney is going to hire somebody to do an asset search, a financial investigation on the potential claimant, or the, sorry, the potential defendant, on the potential people that they could name in the lawsuit.

Now, this is a fairly standardized process for some private investigators who specialize in this type of work. I have an interest in it. I've studied a bunch of the techniques that they use. There are some techniques that are entirely simple and easy and honest and legal. There are techniques that are shady and illegal, but are still done all the time, every day.

And so somebody will do a financial asset search for you. And they'll try to create a profile of how much money you and other people have so that they can understand if you're worth suing. And depending on what's actually found out as a result of that financial asset investigation, that will probably influence how the lawsuit is pressed forward.

Again, only the wealthiest of people or the wealthiest of companies are simply going to pay an attorney an hourly fee to sue you regardless of their potential to collect. People are generally, in this case, generally pragmatic. And if they don't think they're gonna collect money, then what's the point of spending thousands and thousands and tens of thousands of dollars to pursue a legal case?

Now, this is one of your first methods of protection, and that's privacy around your assets. Depending on the amount of target that's laid on you, it may or may not be at all possible for you to have total privacy around your assets. I'll talk more about financial privacy, but the thing you must realize is if the incentive is high enough, somebody could ultimately, if they're willing to pay, somebody could ultimately find out about just about everything you do.

So you can never rely on privacy. You might have a magnificent house that you hold in a private trust that nobody could prove that you live there. But if somebody follows you home from your office and a private investigator tails you home, then they can start to figure out, oh, that's where so-and-so lives.

Now I understand where they live. You might, I'll skip all the other examples for now, but privacy is an important first strategy because it helps to protect you at this stage of the financial investigation and the litigation process, but it's not the ultimate thing. You can never rely just on privacy.

If a financial investigator is unable to locate significant assets, doesn't mean they don't exist, but if they can't locate significant assets, then there's a very good chance that the lawsuit will never proceed past this point. There's a good chance that the attorney will say to the plaintiff, listen, I'd like to take the case, but I'm not gonna take it on a contingency fee basis, but I'd be happy to take it on an hourly basis.

Well, very few plaintiffs would have the tens of thousands of dollars to be able to agree to paying an attorney their hourly fees. So this would substantially narrow the number of potential plaintiffs that would bring a case against you. But if substantial assets are located, then there's a good chance that a lawsuit, regardless of its legal merits, will be filed against you.

So this is the pre-filing stage where there's a financial economic analysis and a financial investigation that comes into your affairs. Now, if the attorney and the plaintiff can come to an agreement, we move into the actual filing of the lawsuit. In this case, a complaint is prepared, and that complaint is filed with the local court.

And the key thing to recognize here is the complaint doesn't have to have all the details. The lawsuit doesn't actually have to have all the details. After the lawsuit is filed, you move into a discovery phase where the case will come out. The complaint itself, at times, can be somewhat vague, and it may not have all the facts behind it.

Just because you've been careful in all your dealings doesn't mean that somebody can't file a complaint and you be called in to defend yourself. Just because somebody's lawsuit is, I'm avoiding the use of the word frivolous, but is not exactly strong doesn't mean you might not wind up in a situation of spending lots of money on legal help to defend yourself and spending lots of time and stress to do so.

At this stage of the legal procedure, there is a possibility in some cases that a plaintiff can have a pre-judgment writ of attachment produced by the court, which will effectively freeze some of your assets. This is not a tool that's available in all or even most cases. It's available only, usually, in cases that are related to specific contracts, commercial contracts.

The claims need to be specific, and there needs to be a good ability for the plaintiff to show the judge, hey, there's a good chance, if this goes to trial, that I'm gonna win. But in some cases, the judge will actually issue a pre-judgment writ of attachment, which will effectively freeze your assets.

If it's issued against real estate that you own, that real estate can't be sold or financed once that writ has been filed against it. If it's against money that you have in a bank account, that money can't be spent. It can't be withdrawn. It can't be moved. So there is a legal judgment or a legal option available at this stage, but it would be more unusual, and it's not available unless somebody's alleging negligence against you.

Then we move into the discovery phase. And the discovery phase of a lawsuit is where each side in a lawsuit, the plaintiff and the defendant, are able to try to probe one another, the information that each of them has, and build their various cases against one another. And those cases come from asking questions of one another, interrogatories, written questions, comes from interviews and interrogations, depositions.

It comes for the request for production of documents. And this can, depending on the lawyer and the strategies, can be used even part of a legal strategy. For example, somebody may ask for so much information from you that they're just trying to bury you in work that you have to produce for them so that you might be inclined to make them a settlement offer early on to try to avoid the hassle.

Sometimes, however, these details are just simply a normal part of collecting the facts of the case. There are massive potential sources of information that an attorney could seek to exploit if they could demonstrate that it is connected to their case. One of the defensive plans, I'll come back to defensive plans at a later date.

So this is the, later in the show, this is the discovery phase. Then if the case is not settled before trial, which of course many lawyers would seek to do, the case is not settled before trial and the case will go to the actual trial. If the case goes to trial, then the facts of the case are tried and a verdict is reached.

If the verdict comes against you, then a judgment is produced by the court against you. And the judgment legally authorizes your creditor, the person that you've lost the case against, now your creditor, your creditor to collect the money or the assets from you to satisfy the judgment and the amount that the court has awarded to them.

Now they've got to find your assets. And at this point in time, you have one of the most powerful tools that a creditor can have, which is the ability to force you to take a debtors examination. And in the beginning of the lawsuit process, the plaintiff has no legal ability to force you to say anything about your assets.

The attorney, as I said earlier, could hire a private investigator, but that private investigator has no legal ability to walk into your office and say, "How much money do you have and where is it?" They're looking through public records, they might be doing surveillance, they might go and search through to try to find what you own, they might have some underhanded and illegal methods, some sources at the banks to find out how much money you have in the bank, et cetera.

But at the end of the day, they don't have any legal tools against you. But a debtors examination changes all that. Because now you will be asked to make a list of all of your assets, to say what you own, where it is, how much it's worth in great detail.

You can also be asked if you've made any transfers of money, if you gave money away before the lawsuit at any point in time. And a debtors examination is forced upon you under oath, where you have to give true and complete answers. And if you fail to give true and complete answers to those questions, you run the risk of committing a felony offense, which is very, very serious.

So basically, you should always plan that in a debtors examination, you're always going to be listing everything that you own so as to avoid committing a felony. Remember, here at Radical Personal Finance, we don't ever want to commit felonies because those limit our freedom significantly. So I want you to live your life very carefully to avoid committing any felonies, and then understand how to conduct your life very carefully so that even any accusations of any felonies completely fall aside.

And it starts by telling the truth. So in that debtors exam, then the creditor finds out about the assets. And then at that point in time, then the court can actually issue a writ of execution, which authorizes the sheriff or whoever, the appropriate law enforcement authorities are to take possession of your properties.

They can force the sale of a house, they can seize assets from a bank, they can seize physical property, the sheriff can come and collect certain physical property. And then that property or money is turned over to the creditor to satisfy the judgment. Now, there's some interesting texture that we could talk about all those topics more, but that's the basic process, the basic legal process that you will be subject to.

Now, let's briefly give an overview of some of the different strategies that will be involved in your overall asset protection planning. The first thing that you want to be careful of is always be careful to be prudent in all of your conduct and all of your actions. So you know, you need to always be careful to try to minimize anything that would give cause, give rise to a potential claim against you.

And then also to minimize anything that would give anybody a legal case against you. So if you need to shovel the snow or salt or sand the sidewalk so it's not icy, go out and do it so that somebody doesn't come along and slip and fall, that's the right thing to do.

Don't text and drive, pay attention to your driving so you don't run into somebody at a stop sign. Be prudent in all of your actions, be careful so that you can minimize the facts that occur in the first place. In life, many of these things are just simple split-second decisions.

But if you'll take the careful decision, then you can minimize massive opportunities. Let me just repeat, you know, texting and driving has about the same impact, my understanding of the data shows that it has about the same impact as drunk driving. Now, very few of us would go and drunk drive, but how many of us are guilty of texting and driving?

So just simply choose not to. And that's a simple choice that you and I can do, but it's a simple choice that could have profound benefits, financial and otherwise. I mean, just imagine the horror of running into somebody and killing somebody because you weren't paying attention. Imagine the horror of that on your conscience, let alone the financial implications to your wealth.

So always be prudent, be prudent, be careful. And if you'll implement a lifestyle of prudence and carefulness, then you can probably avoid many of the facts that might arise. And then if those facts arise, you can put the strength of the evidence on your own side. So that's the obvious first thing that you always have to consider before any facts occur, be prudent and be careful.

Now, what about at other stages of this process? It's good for you if possible to appear to be utterly financially bankrupt to the greatest extent possible. Now, of course, this may affect some of the lessons you're trying to teach others, this may affect your standing in the community, but just simply from a kind of an extreme example, if you could simply appear to be bankrupt at all times, that would minimize your vulnerability.

So how could you do that? Well, we'll talk about some of those strategies. We'll talk about things like equity stripping, where you strip equity out of visible assets and put it into invisible assets. But that's one of the most important asset protection planning strategies is always equity stripping. But if you could just simply look bankrupt at all times, that would help to protect you from lawsuits because you eliminate massive numbers of potential plaintiffs.

You know, the attorney hires the private investigator, private investigator come back and says, "This dude doesn't have any money. You know, he lives in this house, but the house has a giant mortgage on it. He's spending money like crazy trying to impress all of his friends, he's totally bankrupt.

If he filed today, you wouldn't gain a thing against him." Well, that can avoid even many lawsuits being filed. And it also puts the strength on your side as well of being able to protect yourself and just simply say, "Hey, I don't have a lot of assets." So you want to appear to be financially bankrupt to the greatest extent possible.

And you wanna have maximum privacy around your affairs. Somebody could try to look into you and say, look into your money and say, "Well, I don't know, they might have money, but I sure can't find it." That also can be an effective strategy. So that's kind of an extreme, extreme case.

Now, if assets are located, and again, remember, if you lose a lawsuit, if assets are located, you want those assets to be totally unreachable by creditors. Most common theory here is exemption planning. So if you have money, but you have a million dollars in your 401k, and you have no other money, the creditor is not gonna be able to collect against that.

So kind of an ultimate perfect scenario is if assets are ever located, then you want them to be totally unattachable, unreachable by your creditors. You can accomplish that with simple mundane things, exemption planning, homesteading a property, life insurance may be exempt in your state, annuity assets may be exempt in your state, your ERISA-governed qualified plans, your 401ks, 403bs may be exempt in your state, or it might be with very exotic, an offshore asset protection trust down on the Cook Islands.

So yes, you have money, but it's, again, it's in an offshore asset protection trust down on the Cook Islands, and that trustee is never, ever going to comply with the US courts, first and foremost. If they wanna sue you, they gotta sue you in the Cook Islands, and the trustee's never gonna make a distribution.

So if assets are locatable, and something comes against you, then you want those assets to be utterly unreachable by your creditors. And then finally, the next stage is, if assets are locatable and reachable, attachable by your creditors, you want them to be toxic to those creditors. So if possible, you want to, in very sophisticated asset protection planning, you wanna lay a trap to the creditors, where yes, they can have this LLC member interest that you own, they receive the interest, but you set a trap so that if they receive the interest in this foreign LLC, which is entangled with the trustee in your offshore trust, they receive the interest, but now the manager of that LLC chooses not to make distributions to that particular member because of what you've put in the LLC, and now you lay a trap so that the person has phantom income.

And so now your creditor is receiving an LLC member interest, and they're entitled to all the distributions, but the manager of the LLC is not making distributions to that particular LLC member, but now they are reporting to the IRS what that LLC member's share of the profits are, and so now your creditor owes a tax bill.

You can do that. You can set it up so that if they own the LLC interest, then they receive the tax bill for phantom income. They never received any income, but now they owe the IRS, and that can make that asset toxic to the creditor and can possibly persuade them to engage in a post-judgment settlement, where now you say, "Hey, listen, "you have this judgment here of a million dollars, "and you've got this LLC.

"You executed a charging order "against this member interest, and you own it, "but now you're getting a tax bill for $40,000 a year. "Why don't we settle this, and I'll come up with, "and I'll pay you $300,000, "and then you surrender this judgment "that you have against me for a million dollars." And then you can possibly enter into post-judgment negotiations and settle your case.

So that's kind of a dream world if we had everything as perfect as I can personally imagine it to be. Maybe you find that fun. I always like to start with what's the perfect, and then how close can I get to that practically given my actual situation? But that is how you protect yourself.

Be cautious and prudent in your activities. Appear to be financially bankrupt to the greatest extent possible, and/or have as much absolute privacy so that your financial assets are unlocatable. If any assets are located, make sure they're unreachable by your creditors by carefully putting up firewalls between those assets and other assets, by carefully bringing in legal protection for those assets with various strategies.

If assets are reached ever, they're located, they're reached, then ultimately try to make sure that they're toxic to the creditors, if at all possible. That will help you. Two other points of defense, and then we'll close out today's show. You wanna make sure that you at all times think carefully about your legal case as well, which is why you always want to be prudent in your affairs.

Make sure that you, if you are supposed to be doing something legally, do it. If you're supposed to have good books and records for your corporation and take annual minutes, do that. If you're supposed to have an annual meeting, do it. Make sure that you actually properly manage something, because it would be stupid for you to go through all the work and hassle of setting up a well-run corporation, and then by commingling your assets, you give the judge everything they need to do, just simply pierce the corporate veil, and boom, everything falls apart.

So do the things that you need to do. Legally protect yourself. Don't keep around mountains and mountains of stuff. Don't keep around long histories and tens of thousands of emails. If you're required legally in your industry to retain emails, great, but if not, get rid of that stuff. Don't keep long records.

Don't keep messy computers with all kinds of stuff on those. Keep your devices encrypted. Make sure that you securely delete and completely eliminate the files. Don't create stuff that could cause problems for you in discovery, because you will hang yourself if you're not careful with that. So make sure that you do that.

Keep your communications records cleared and purged. There's no reason for you to have a year's worth of text messages with people. There's no reason for all those things. So think defensively and eliminate all of the stuff that could come against you in a legal trial. That's always in your best interest, whether you're doing something wrong or not.

I'm not even, just do the right thing, but there's just no reason to maintain all these extensive files, and there's no reason to maintain them in a way that could sink you. Just always imagine this. Somebody walks in, whether it's a law enforcement official or whether it is a law enforcement official or a deposition, somebody walks in and says today, we are subpoenaing your, that's not the right word.

We're seizing your computer. We're seizing your computer, and we're gonna do a forensic analysis of it. We're gonna pull every file off of it. Could that cause you problems? If so, fix it today. Or we're seizing your cell phone. Could that cause you problems? If so, fix it today.

Some point, maybe I'll do a whole show on that, but it's one of the biggest weaknesses that most people have is we don't do a good job with controlling our data, but make yourself a tough opponent in a lawsuit. Good asset protection planning will protect you at every phase, and that's why it's so important.

Be tough. Put yourself in a tough situation so that you would be a very, very tough opponent. By being tough, you can't eliminate the ultimate, if you do something very wrong and you have a very motivated person coming against you, you can't eliminate that. But by putting yourself in the toughest situation, you can make most of the problems go away.

Just a very simple example from my own personal life. One of the benefits that I've always had in my entire life, and it's of none of my own doing, is I've always been a physically large person. And when you are a physically large person, people don't mess with you.

I never was messed with in school because I was physically large. Now, if you are a small person, you're gonna have to learn how to toughen yourself up and deal with that. These are the cars that were dealt. But I always observed that nobody ever messed with me because I was physically large.

Now, we know that in terms of schoolyard bullying, but you can put the same thing in place for yourself in every stage, even just in terms of protecting yourself from physical attack. If you look like a tough person, if you just walk like you know where you're going, all the simple things that we all know to do, when you're out walking on the street, walk like you know where you're going.

Don't be paying attention. If your head is up, your eyes are looking around, you will dissuade an attacker on the street because they just look at you and say, "Ah, there's somebody easier next door." Now, the same psychology applies in asset protection planning. By being a tough person and having all of these things put in place, you will avoid most of the problems.

Remember, the vast majority, I think like 95% of lawsuits are probably settled out of court. And so at every stage, you're dealing with just a psychological game of negotiation here. And you're dealing with basically a negotiation and who's the tougher person with more to lose. If you're very prudent and very careful, then you'll eliminate the facts that could bring somebody against you in the first place.

So if you don't allow in your company a sexualized culture, you eliminate the sexual harassment. If you fire the employee who is acting out of turn, you eliminate the potential claim. If you don't ever spend time with somebody of the opposite sex alone, you eliminate the entire case. And so if you are prudent in those things, just going with a totally different area of civil litigation that happens all the time, if you are simply tough in that way and you create the right culture, you protect yourself.

If you clean the sidewalk, if you fix the gutter, if you cover over the old well, if you look for the potential risks and you fix those things, then you avoid the circumstances in the first place. Now, if circumstances occur or somebody thinks that circumstances occur or somebody feels that circumstances occur, by having all of your assets hidden and protected, then when that attorney does an asset search, they say, "Go back to the plaintiff and say, "I'm sorry, this guy doesn't have any money." Or if he does have money, "I don't know where it is." And they require more money from the plaintiff.

Well, most people don't go around with $30,000 to give an upfront fee to an attorney. And so you eliminate the lawsuits. When the lawsuits come, by putting yourself in a maximally strong position, you can be very aggressive to settle it quickly and to settle it on your terms and to cause the opponent to cave as quickly as possible.

So, and then if ultimately you wind up going to trial, which is the minority, if you go to trial, you have the strongest case by doing all the things that we've talked about. And then if you lose your case, then you wind up by, if you could put an asset in there that will ultimately be toxic for the creditor to hold, then you put in place what you need to even still be tough after the fact and to, and by isolating that, compartmentalizing that problem, the rest of your financial life should be humming along.

So it's not, you don't face wipe out risk. That's the whole point along the way. So I hope this is useful to you as a thought. We'll get into more specifics coming forward in the future, but I hope this helps you to have a good understanding of the overall process of litigation.

I wanna encourage you and strengthen you to be tough and to get you to act now and to be tough so that you can be protected. Remember, if you're wrong in something, you owe somebody, you can always take your money and go and pay it. That should, I'm repeating it 'cause it needs to be said.

If you want to give somebody money, that's your prerogative. But in all these kinds of things, you owe it to yourself and to your family, to your business to be in a tough situation by putting in place good planning. That's it for today's show. But in closing, I want to expand that theme for just a moment as I continue to market to you my most recent course, which is the "Radical Personal Finance Guide" on how to save money and borrow money safely using credit cards.

One of the reasons I created this course was because this was the type of planning that I didn't see people talking about as to how to be tough in your borrowing. And it's simply, so it's simply using things like credit cards often instead of other forms of credit because they're unsecured loans.

And yet unsecured loans can be a wonderful benefit, but they can also be a very, they can be poorly managed. And I've tried to give example again and again and again of how foolish it would be for you to take out a secured loan if you have the option for an unsecured loan.

Because with an unsecured loan, if you use that unsecured loan to buy property, you can always go and sell the property and pay the loan back but somebody can't force you to do that. And in my observation of counseling people who are deep in credit card debt, and especially those who often wind up in very difficult circumstances, they never intended to be there in the first place.

They didn't think that they would get laid off. They didn't think that when they were laid off, that their kid would get sick. They didn't think that when their kid got sick, that their spouse would get cancer and they wouldn't be able to get reemployed. But yet one thing leads to another.

And so I always want you to think of maximum toughness, worst case scenario, what's the worst case scenario, and then position yourself for that. And then usually if you do that, you never get there. You never wind up having the problems. My observation has been a little bit of care, prudence, investigation, thoughtfulness, and good forward-thinking action put in place in the beginning can save all kinds of potential problems down the road.

That's the basis of financial planning. That's the basis of asset protection planning. Frankly, that's the basis of most life planning. Most of the problems that we face are of our own doing because we weren't prudent in the beginning. Now, some things can be gotten out of some things you just deal with, that's life.

But I wanna encourage you, even in your simple day-to-day financial transactions, with your credit cards, put things in place. Put the strategies that I teach you in the course in place so that you never miss a payment, ever. So you're never a day late on a payment. So you keep your credit score very, very high 'cause you never know when you need it.

Go to radicalpersonalfinance.com/creditcardcourse. Check that out and sign up, give the course a try. Unconditional money back, 30-day money back guarantee. Try the course, take the whole thing. I think it's five, six hours of audio. You take the whole thing, you can do it in a weekend or over the course of a few nights.

If you're not satisfied, always happy to return your money, but I think you'll be satisfied. So far, every member of the course has been satisfied. So go to radicalpersonalfinance.com/creditcardcourse and sign up today. Thank you.