LOE and litigation risk.

[aaarghhh]

See_Change started a thread about trusts and protection and It got me thinking anbout asset protection while using LOE strategies. I'm worried about my next step in IP investing and how to protect it.

Keith had suggested using regular top ups to keep the LVR's at 80% which MIGHT mitigate the probability of solicitors starting and an all out offensive on your equity....

Anyone got ideas on asset protection using a LOE strategy like Rixters? From an asset protection perspective. I see myself as a ripe plum for the picking as I have 10 properties with 1,2,3,4,5,6,7,8 and 9 years growth / readily available equity just asking to be plucked.

Aaron

 

[letiha]

Well I suppose the real question is are you in an occupation where you are at risk of being sued, and do you have adequate insurance.

 

[Aaron Sice]

if you are in an occupation that is a high litigation risk, then operate under a company structure - not a personal ABN. the company structure bills - therefore, any litigation is taken out against that company, not you personally. if the company has ONE director (you) with ONE $2 share owned by that director, then value of litigation will be max $2.

i think it works like this anyway - my accountant tells me to use the business for all billing as it's solid litigation protection.

 

[baconinoz]

I'm in an occupation with high litigation risk. Does anyone know off hand if our properties are in my husband's name (which suits us) if our assets are then protected?

Thanks,
(sorry, can't help you Aaron)

 

[Dazz]

solid litigation protection.

Is there such a thing ??

Having read quite a few court transcripts over the last few years, I'm constantly amazed at the vagaries and twists and turns that can occur.

1. What you think is solid evidence can be dismissed for the most minor of technicalities.
2. If the mag or judge is having a bad hair day - look out.
3. If the defence solly says she is fantastic, but turns out to be rubbish, what do you do ??
4. If during the discovery process, the litigant finds (or more likely their legal rep) something they want to get their fangs into - like a big fat juicy pile of your equity - hang on for the ride.
5. Medical expert opinion can always be countered with the exact opposite view by another expert with even higher qualifications.
6. Time drags on and every step of the way is either hindered, deferred, put aside, recessed, adjourned, delayed and strung out. Paying for little pi$$y "units" of 6 minute time @ $ 50 a unit....good luck arguing the toss over a 4 or 5 year timeframe.
7. Appeals - just when you thought....after 4 long drawn out years...you had a win - you get to start all over again in a higher court. Kaching kaching.


This sounds very familiar to poor old Windsor on his thread looking for an iron clad agreement that will be binding and unequivocally enforceable in any court.....there ain't no such beast.

Everything in legal circles always has that little caveat - "except by leave of a court". They don't like to tie their own hands you see.

A simple one line question, asked by a layman, looking for a simple answer - can easily be strung out for years with arguments....arguing is what they get paid to do....all with the delicious uncertainty that nothing is fixed in stone. The laymen is summarily left hung out to dry, wondering what the hell hit him.

 

[boomtown]

Try to avoid going to court to fight over anything less than $300 million. And even then try to avoid it.

 

[Witzl]

A friend of mine (mentor, really) has over $25million in property, and his asset protection is exactly what Keithj suggested.

He is always topping up his loans to max LVR, and then a trust takes out a mortgage on the remaining equity (or something like this - im no expert in trusts!). The idea there is that when someone looks to sue him, they will look up his assests and find that he basically has virtually zero net worth, and not bother to sue him.

.... i would also consider him to be in a potentially high risk position for litigation, so im sure he has done his due dilligence on this topic.

 

[Ausprop]

Is there such a thing ??

Having read quite a few court transcripts over the last few years, I'm constantly amazed at the vagaries and twists and turns that can occur.

being involved with a case or two at the moment has made me realise this. With one of them, the argument from the other side is as weak as water but the cost and timeframes have blown out incredibly.... certainly way beyond what my lawyer initially suggested. and just when you think the end game is drawing near it all opens up again and we wait for a few months for a mediation or reply from the other side or barristers opinion or something. Meanwhile the legal bills roll in each fortnight relentlessly

be warned - suing for damges or specific performance is never quick, easy nor assured

 

[aaarghhh]

Well I suppose the real question is are you in an occupation where you are at risk of being sued, and do you have adequate insurance.

Yes I believe that I am in a position that is at risk. I am a landlord.

I don't know if there is such a thing as anti-litigation insurance

Should a landlord have personal liability as well? Or does my general landlord insurance and house insurance cover this?

 

[aaarghhh]

Having read quite a few court transcripts over the last few years, I'm constantly amazed at the vagaries and twists and turns that can occur.

Maybe you have given me the answer Dazz in an indirect sorta way.

Reading the court transcripts......

It's time to see what happens in the real world when. Find out the court case transcripts and who won and lost. More importantly, why they won and why they lost.

I should've done this before. I have been reading the Land & Environment court cases for property developments on this side of the planet to learn who to use as a starting point for my own developments.

 

[letiha]

I really think people over analyse their risk to litigation, that is being sued for an amount of money.

If you have the appropriate insurance on your properties/car/business.occupation you will be covered. Your insurer will indemnify you and they will cover the legal bills. Infact they will ingage the solicitors yourself.

All i do everyday is plaintiff litigation for claims for injuries. I have only seen one claim where the home owner had to pay up the cash and that is because they had let their home insurance lapse and their child's friend had sustained a brain injury when a rope swing snapped (was hanging over a wooden slepper !!!!! CLEVER). If they would have had the right insurance no problem

 

[see_change]

I really think people over analyse their risk to litigation, that is being sued for an amount of money.

If you have the appropriate insurance on your properties/car/business.occupation you will be covered. Your insurer will indemnify you and they will cover the legal bills. Infact they will ingage the solicitors yourself.

All i do everyday is plaintiff litigation for claims for injuries. I have only seen one claim where the home owner had to pay up the cash and that is because they had let their home insurance lapse and their child's friend had sustained a brain injury when a rope swing snapped (was hanging over a wooden slepper !!!!! CLEVER). If they would have had the right insurance no problem

Interesting

Cliff

 

[boomtown]

I kinda feel the same way.

If you live your life as a normal concientious human being you really dont have much to fear from lawsuits (apart from divorce).

 

[letiha]

Yes...Divorce.....

Hmmmmm now there is an idea, what about divorce insurance, that could be a money spinner. Think how much people pay to protect their assets...

 

[boomtown]

LOL

Talk about moral hazard. All those 70 year old oil tycoons marrying 24 year old night club hostesses because hey - they have divorce insurance. Hawt diggity dawg Im off to Hooters to find me a wife. Theres oil in them there hills.