Potential Personal Judgement-Florida

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Naples78
Posts: 3
Joined: Wed Jul 11, 2018 1:16 pm

Potential Personal Judgement-Florida

Post by Naples78 » Wed Jul 11, 2018 1:44 pm

Long time reader, first time poster.

Huge thanks to all of the fellow Bogleheads on this forum. The immense free information, real life cases is instrumental for all of us so thank you to all that have contributed in the past as I hope to do the same going forward.

I am involved in a legal battle with a former employer here in FL going on 3 years now. Besides sucking valuable time and a very good amount of funds to this point, I am still holding strong in the case. After 3 mediations over the 10 months already and no resolution in site with trial scheduled for sometime next year, I am looking for ideas/advice in regards to protecting the capital I currently have.

Keep in mind I am in Florida and have educated myself quite a bit over the last 3 years with this case but I also realize i dont know it all and there might be some strategies I am not aware of so I would like to hear everyone's thoughts.

My Situation:
39 male, single. Living with GF of 5 years now. No kids. No current plans to get married.
Small Business owner with 2 partners. Structured as a partnership with our personal LLCs as partner. Each own 1/3.
Home paid off in full. Approx value: $575K. Homestead protection in FL is a great tool!
No CC debt. Monthly balances if any, paid in full.
No Car Payments.
Fully Funded Solo 401k every year with plans to continue.
Fully Funded HSA Plan every year with plans to continue.
100K Whole Life insurance policy, going on 5th year. 10 pay policy and policy does not allow additional funds to make it paid up sooner.
~450k Taxable Investment Accts.
~1.3M in cash.

Might be missing some additional info. Please feel free to ask away but once again my goal is to get money into accounts that would be protected from creditors should this case go the worst possible route and I would have to file bankruptcy protection (Estimated odds as of now are 20%).

One tidbit i keep getting is to purchase a more expensive home providing me the ability to dump cash into it at the last minute while being 100% protected if a judgement is coming. While that is smart, i dont necessarily want to be house poor either.

Thanks in advance!! :beer

drawpoker
Posts: 1738
Joined: Mon May 19, 2014 6:33 pm
Location: Delmarva

Re: Potential Personal Judgement-Florida

Post by drawpoker » Wed Jul 11, 2018 6:02 pm

Aren't you represented by a Florida attorney in this legal tangle?
Wouldn't he be best able to advise you on strategy if you need to shuffle around, or re-title, some assets?

Whakamole
Posts: 635
Joined: Wed Jan 13, 2016 9:59 pm

Re: Potential Personal Judgement-Florida

Post by Whakamole » Wed Jul 11, 2018 6:16 pm

Or find a trust/estate lawyer who is knowledgeable about asset protection. If this is an ongoing lawsuit, I'd expect financial transactions to get scrutinized if it results in bankruptcy.

AZAttorney11
Posts: 468
Joined: Wed Jan 21, 2015 12:12 pm

Re: Potential Personal Judgement-Florida

Post by AZAttorney11 » Wed Jul 11, 2018 6:39 pm

What did your lawyer tell you? If you end up down the bankruptcy path, you'll want to familiarize yourself with the legal concepts of a preference, fraudulent transfer, and 11 U.S.C. 547 and 548. You've got a fair amount of assets to protect. You needed to start planning for an adverse judgment at the outset of litigation, so talk to your lawyer immediately.

toofache32
Posts: 1213
Joined: Sun Mar 04, 2012 6:30 pm

Re: Potential Personal Judgement-Florida

Post by toofache32 » Wed Jul 11, 2018 11:21 pm

1.3 million in cash??? Isn't that low hanging fruit that is ripe for the taking by a creditor?

TIAX
Posts: 1057
Joined: Sat Jan 11, 2014 12:19 pm

Re: Potential Personal Judgement-Florida

Post by TIAX » Wed Jul 11, 2018 11:52 pm

drawpoker wrote:
Wed Jul 11, 2018 6:02 pm
Aren't you represented by a Florida attorney in this legal tangle?
Wouldn't he be best able to advise you on strategy if you need to shuffle around, or re-title, some assets?
Doesn't sound like it. What's the amount in controversy?

JoeRetire
Posts: 1100
Joined: Tue Jan 16, 2018 2:44 pm

Re: Potential Personal Judgement-Florida

Post by JoeRetire » Thu Jul 12, 2018 6:19 am

Naples78 wrote:
Wed Jul 11, 2018 1:44 pm
my goal is to get money into accounts that would be protected from creditors should this case go the worst possible route and I would have to file bankruptcy protection (Estimated odds as of now are 20%).
This isn't something to DIY or blindly follow advice from random internet friends.
Get legal help from an experienced lawyer familiar with Florida law and bankruptcy.

Do it now.

Naples78
Posts: 3
Joined: Wed Jul 11, 2018 1:16 pm

Re: Potential Personal Judgement-Florida

Post by Naples78 » Mon Jul 16, 2018 1:14 pm

Sorry for delay in replies as I have been out of pocket but I very much appreciate the responses.

I have a well know firm in town working on this case from the beginning. They have been extremely helpful and knowledgeable but I always like to hear other people's perspectives/opinions on things. Being involved in this mess for this long tangles the brain from time to time.

The amount in controversy is anywhere from low six figures to multi-millions. The reason for the large gap is b/c the plaintiff keep changing his tune on what he feels he is entitled to after we keep knocking down his expert's theories.

My lawyer has told me the best/easiest way to protect cash is by purchasing a large home which give you the ability to dump in excess cash before a judgement in the event we think its not going to go our way. I dont necessarily need a bigger home but i understand the theory.

randomguy
Posts: 5806
Joined: Wed Sep 17, 2014 9:00 am

Re: Potential Personal Judgement-Florida

Post by randomguy » Mon Jul 16, 2018 2:09 pm

Whakamole wrote:
Wed Jul 11, 2018 6:16 pm
Or find a trust/estate lawyer who is knowledgeable about asset protection. If this is an ongoing lawsuit, I'd expect financial transactions to get scrutinized if it results in bankruptcy.
Florida allows the homestead exemption for fraudulent conversions so the OP might be able to pull it off. Figuring out its interaction with florida homestead law and bankruptcy law is something that you really want an expert in.

The real problem I see with this plan is that you have a 1/3rd interest in the business. Not sure how you go to work when your interest is owned by someone else or what your partners will think of it.

This is definitely a case where you want some professional advice by people that have done it multiple times. It would be shame to do all this work and learn that you are getting a chapter 13 bankruptcy because of your income.

Naples78
Posts: 3
Joined: Wed Jul 11, 2018 1:16 pm

Re: Potential Personal Judgement-Florida

Post by Naples78 » Tue Jul 17, 2018 9:27 am

Another tidbit I failed to share (not on purpose) is that the my current business/partners that I am involved with are defendants in the same case with me. We are all in the same ship represented by the same firm for obv reasons.

RE: FL Homestead protection...Under bankruptcy law, homestead protection is available in bankruptcy up to $146,450 unless the debtor occupied her current Florida homestead property and previous Florida homestead properties for a continuous 40-month period.

I have had my homestead in FL for 75 consecutive months.

jminv
Posts: 375
Joined: Tue Jan 02, 2018 10:58 pm

Re: Potential Personal Judgement-Florida

Post by jminv » Tue Jul 17, 2018 9:48 am

Your options for your non-qualified investments/cash seem to be a bigger house or an annuity. You can play around with what yield you’d get on the annuity at immediateannuities. I don’t know how you can structure these for asset protection but you can buy life, life with cash refund, and certain term periods. Certain annuities are protected but I would imagine part of it depends on when they were purchased. By this I mean you are already being sued and there will be a judgement at some certain period. There are lookback periods for this kind of conveyance. OJ is used as an example of annuties in Florida. I suppose there would also be offshore Liechtenstein and swiss annuity strategies as well since they are similarly protected there which could be a sort of dual insurance. They, too, have conveyence rules which you might not be able to meet.

As an aside, I wouldn't like the odds of 20% chance of losing everything versus a payoff in the low six figures, considering it would be split 3 ways. A settlement would also be a form of insurance.

Talk to someone in Florida who specializes in this sort of thing. I assume you have a cpa. Ask for a referral or find an asset protection attorney yourself.
Last edited by jminv on Tue Jul 17, 2018 10:09 am, edited 2 times in total.

Big Dog
Posts: 750
Joined: Mon Sep 07, 2015 4:12 pm

Re: Potential Personal Judgement-Florida

Post by Big Dog » Tue Jul 17, 2018 10:03 am

Another tidbit I failed to share (not on purpose) is that the my current business/partners that I am involved with are defendants in the same case with me. We are all in the same ship represented by the same firm for obv reasons.
Which also means that the firm's attny only has 1/3rd of your interest in mind. IMO, it'd be worth a few hours of another attorney's time to look over your personal situation.

TheGreatDane
Posts: 2
Joined: Fri May 04, 2018 4:41 pm

Re: Potential Personal Judgement-Florida

Post by TheGreatDane » Tue Jul 17, 2018 10:46 am

Florida business litigation attorney here. This thread was not a good idea. It's subject to discovery just like your emails and text messages are. If you're concerned about asset protection, speak to a Florida attorney about that...don't post/describe your assets for the world to see.

There are a number of things you can/should do if you're concerned. Florida is very debor friendly.

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