Case Studies

What’s wrong with the following picture?

A new client travelled by car to consult with us as she’d met Barbara at a wealth seminar. She was concerned that she was vulnerable to litigation.

As it turned out she was absolutely correct. All her investments were held individually in either her or she and her husband’s personal names.

Their total net worth was greater than $2,000,000.

Did I mention that she was driving her car…..with a broken wrist!! The Insurance companies would have a field day of she had an accident and hurt someone and was personally sued.

They could have lost everything that was owned in their personal names.

Mixing Risks

Dymphna Boholt often talks about the client who consulted her years ago. They operated a business through a company. Throughout the years of operation their accountant advised them to buy negatively geared properties to reduce the operating profit of the company. So now you have the risk of the business intermingled with the risk of properties as well.

For the layperson who may not have had exposure to the concept of protecting your assets, if the business causes a problem and the litigator sues the company the directors run the risk that the litigation suit may be greater than the value of the business and all of the assets of the company can be exposured. The situation is the same if it were one of the properties that caused a problem.

She asked the client what business the company was in…..they were explosives manufacturers!!!

I’m Being Sued for What?

Some excessive lawsuits include:

The 1992 case against McDonald’s brought by a woman who burned herself when spilled coffee on her lap. A New Mexico jury awarded her $2.9M in damages.

The most outrages lawsuit is for:

One woman sued an open air mall after she was “attached” by a squirrel on the grass, claiming that the mall “failed to warn her about these animals.”

Is Litigation in Australia as bad as the USA?

Allow us to draw your attention to some of the warnings attached to products to prevent manufacturers suffering from litigation. The following is an non exhaustive list in product information booklets:

On a curling iron: For external use only
On a Hair dryer Do not use in shower
On a Hair dryer Do not use while sleeping
Underarm deodorant Do not spray in eyes
Carboard Sunshield Do not drive with sunshield in place
Electric Cattle Prod For use on animals only
Manual for Microwave Oven Do not use for drying pets
Toilet Bowl cleaning brush Do not use orally
Bottle of sleeping pills Warning: May cause drowsiness
Portable Stroller Remove infant before folding
Electric Rotary tool This product not intended for use as a dental drill

Asset Protection Myths

My neighbour who knew a little about trusts was concerned that he could be sued because of the behaviour of his dog, it was aggressive and often bit people.

So he came up with the brilliant idea that he would set up a trust and put the dog in a trust. His idea was that if the dog bit someone and they sued the trust…well then they would “get the dog that bit them!” It’s a good plan but a myth as animals can’t be held in trust.

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