Protect Your Money From Lawsuits
Do you ever get concerned about being sued? We’re in a pretty sue happy world, right? Attorneys run around everywhere. Especially if you’re a business owner. You’re just one slip and fall away from people snatching money out of your bank account.
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Why it's important to understand to Protect Your Money From Lawsuits.
Do you ever get concerned about being sued? We’re in a pretty sue happy world, right? Attorneys run around everywhere. Especially if you’re a business owner. You’re just one slip and fall away from people snatching money out of your bank account. Well, guess what? There are very few assets out there that you have that people can’t latch onto.
Creditors or anything of the sort. So, another great benefit to having money in an insurance contract, whether it’s a life insurance contract or an annuity, is it’s protected from lawsuits. It’s not protected from fraud. So if you do something illegal out there, they can still latch on to it. But assuming you get into some civil situation, and a perfect example of this, we all remember OJ Simpson.
He was criminally found not guilty, but he was civilly found guilty. And her family was awarded millions of dollars, but guess what? He didn’t have to pay that because he His money was in insurance contracts. It’s a sad situation, but it’s the reality. It just goes to show you, if you want to protect your money from lawsuits, put your money in insurance contracts, at least a portion of it.
Keep that in mind.
Keypoints for Protect Your Income:
- Concerns About Lawsuits:
- Mario highlights that we live in a “sue-happy” world, particularly risky for business owners.
- Business owners are especially vulnerable to lawsuits, such as a simple “slip and fall” incident, which can lead to significant financial loss.
- Limited Asset Protection:
- Few assets are fully protected from lawsuits or creditors.
- Most assets can be seized or “latched onto” by creditors in civil cases, which creates financial risk.
- Insurance Contracts Offer Protection:
- Life insurance contracts and annuities provide strong asset protection.
- These assets are protected from lawsuits, although they are not protected in cases of fraud or illegal activity.
- Example of O.J. Simpson Case:
- O.J. Simpson’s case is cited as an example where he was found not guilty in criminal court but liable in civil court.
- Simpson avoided paying the civil judgment because much of his money was tied up in protected insurance contracts.
- Key Takeaway:
- Mario advises placing a portion of one’s money in insurance contracts to protect it from potential lawsuits.
- This strategy is presented as a way to secure assets, especially for those in high-risk professions or situations.
Protect Your Money From Lawsuits
Additional Points (for Enrichment)
- Importance of Financial Protection:
- Asset protection strategies are crucial for individuals and businesses alike to safeguard their financial future.
- Insurance products like life insurance and annuities not only offer growth and tax benefits but also serve as shields against legal claims.
- How Insurance Contracts Work in Asset Protection:
- Life insurance contracts are legally recognized as “protected assets” in many states, meaning they can’t easily be seized in civil judgments.
- This can be particularly valuable for business owners, professionals, or individuals in high-liability environments who want to safeguard their wealth.
- Balancing Risk and Protection:
- The transcript emphasizes balancing potential risks (such as lawsuits) with proactive financial planning.
- Diversifying wealth, including through insurance contracts, helps mitigate these risks and provides peace of mind.
- Insurance Contracts vs. Other Asset Types:
- The text could explore how insurance contracts compare to other asset types like real estate or stocks when it comes to legal protection.
- Insurance contracts have a distinct advantage in asset protection over other forms of investment.
It is confirmed that life insurance contracts and annuities can offer asset protection in certain circumstances, including shielding assets from lawsuits, but the protections depend on specific regulations. For instance, Section 7702 of the U.S. Tax Code defines what qualifies as a legitimate life insurance policy, allowing those that meet the criteria to enjoy favorable tax treatment, including protection from certain creditors in civil cases. This applies to life insurance policies where the cash value grows tax-deferred, and the death benefits are generally tax-free.
Annuities, regulated under 26 U.S. Code § 72, also offer tax-deferred growth. The proceeds from an annuity or life insurance contract are typically shielded from creditors in civil judgments, but they are not protected in cases involving fraud or criminal activity
If you’re looking to explore these sections further, you can find the relevant details on the IRS’s official website under Section 7702 and 26 U.S. Code § 72, which outlines the specific rules surrounding annuities and life insurance proceeds
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