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TRUMP UNIVERSITY WEALTH BUILDING 101

Here’s an example. Suppose you’re involved in a car accident, suffer a
broken arm, and miss work for a week. Obviously, you’re going to have
medical bills, lost income, and maybe incur some pain and suffering. You may
feel that you have the right to recover damages from the person who caused

the accident, so you walk into an attorney’s office. The attorney will decide
whether to take your case, not by how much you suffered, but by how much
money can be gained by suing the person who caused your accident.
Now let’s turn the tables. Suppose you own a trucking company, and one
of your trucks gets into a minor fender bender with another motorist. At the
scene of the accident, the motorist has no injuries whatsoever, but once he gets
home, he might decide to feign an injury, sometimes referred to as an IRL
(Individual Retirement Lawsuit). In this scenario, his attorney will decide that
a lawsuit is a good idea by looking at the size of your pockets. Unfortunately,
this deep-pocket theory is the unoffi cial legal standard that a lot of attorneys
follow, so you’ve got to be prepared.
In deciding if a plaintiff can get his hands on your assets, here’s what an
attorney will determine:

• Can assets can be reached? (by filing a lien on your property, garnishing,
or legally accessing, your future wages, or forcing the sale of assets?)
• Can assets be located? Many times, a shrewd individual or business will
hold their assets in the name of a friend or spouse, in a corporation (or
corporations), in a trust, or even outside the country, making them

difficult to locate.

• Can my plaintiff win? That’s the final consideration—if the answer is
yes, you’d better be prepared.
The first, and easiest, step in formulating an asset protection plan is to

take advantage of available exemptions. An exemption is a law that states that
certain property is exempt from the reach of creditors. The most common
type of exemption is the homestead exemption . If creditors sue you, or in the
event of a bankruptcy, your home is protected up to a certain dollar amount.
This amount varies by state. Other types of exemptions include:

• Retirement plan exemptions
• Wage exemptions
• Annuity exemptions
• Tools of the trade exemptions (tools, computers, books, etc.)
• Household goods exemptions

• State-specific exemptions (check with your lawyer for these)

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