When Jason and Sarah Thompson* started their small business a decade ago, they never imagined it would grow to generate $1.8 million in revenue annually. Along with their thriving company, they had wisely invested in three rental properties across California and had settled into their dream home with their sons, Alex, 19, and Ryan, 17. Life was good, but Jason and Sarah couldn’t shake the feeling that their success might paint a target on their backs.
The Thompson’s story is one Americans — especially Californians — frequently face and shows how a sound asset protection strategy, like Dahl Law Group’s new Foundational Asset Protection Plan, allows families like theirs to grow as individuals, entrepreneurs, or as business owners. Families deserve a chance to protect what they’ve built while growing the financial seeds planted.
The Thompsons knew that their business and real estate investments placed them in a position of both prosperity and vulnerability. What if someone sued them? What if their assets were suddenly exposed to the whims of a legal system they didn’t fully understand? These worries kept them up at night, especially as they considered their sons’ futures.
Protecting What You’ve Grown
Determined to protect their hard-earned wealth, Jason and Sarah turned to Dahl Law Group for advice. Our team listened to their concerns and crafted a comprehensive Foundational Asset Protection Plan designed to shield their assets from potential threats.
We started by advising the Thompsons on how to reallocate their assets into different classes, maximizing their legal exemptions from lawsuits and bankruptcy. To protect their rental properties, we established Wyoming LLCs, one of the best options for relief from reverse piercing – a lawsuit against them personally endangering their rental properties. They also had one very valuable property – a $2.2 million commercial property where they ran their business. We set up a separate LLC to hold that property – after all, if there was a lawsuit regarding one of their residential real estate properties, ALL properties (including the commercial property) would be at risk. The Wyoming LLCs also provided increased protection from piercing the corporate veil.
Understanding the importance of protecting their business as well, we set up a Family Limited Partnership to hold their company, insulating it from any judgments that might arise regarding their business. We also guided them on securing the proper insurance limits for their various assets, ensuring they weren’t over or underinsured. To protect their primary residence, we advised them to secure a Homestead Exemption, adding another layer of protection to their most valuable personal asset.
Tragedy Tests the Plan
It wasn’t long before their planning was put to the test. One evening, Alex was involved in a tragic car accident. While Alex walked away unharmed, the other driver was seriously injured, sparking a contentious lawsuit against the Thompsons. Despite the insurance company stepping in to defend them, the other driver’s family wasn’t satisfied with the policy limits — they had discovered the Thompsons’ financial success and saw a potential windfall in pursuing additional damages.
Thankfully, Jason and Sarah had the Foundational Asset Protection Plan in place and Dahl Law Group as trusted advisors. We immediately intervened, sending a letter to the other family’s attorneys. We meticulously outlined the various exemptions that protected the Thompsons’ personal assets, all thanks to the careful planning we had executed months before.
We explained that, even if a judgment was obtained, it would need to be enforced in Wyoming to affect their rental properties — an incredibly challenging and costly endeavor for the plaintiffs. Additionally, we made it clear that any effort to target their business would be futile, as the Family Limited Partnership structure effectively insulated it from such claims.
To reinforce our strategy, we teamed up with a skilled bankruptcy attorney who analyzed the Thompsons’ financial situation. The attorney created a mock bankruptcy scenario, demonstrating that any attempt to pursue additional damages would result in the other family getting nothing more than the insurance payout. This was due to the exemption planning that we recommended, allocating their personal assets into different buckets to maximize lawsuit protections already provided by the law, as well as the Homestead Exemption. Faced with this reality, the plaintiffs quickly agreed to settle for the insurance limits rather than chasing a fruitless lawsuit.
Jason and Sarah’s story is a testament to the importance of proactive asset protection. By taking the time to plan with Dahl Law Group, they were able to safeguard their wealth, protect their family, and avoid a financial disaster that could have upended their lives.
Asset Protection With Dahl Law Group
Our new Foundational Asset Protection Plan offers the same peace of mind to families across California. Whether you own a business, have real estate investments, or simply want to ensure your assets are protected from unforeseen circumstances, we’re here to help you protect your future. Don’t wait until it’s too late. Schedule a consultation with Dahl Law Group today and let us help you build a fortress around your family’s financial well-being.
*A hypothetical retelling based on true events
Dahl Law Group
