Lawsuits Are a Big Business—Here’s How to Shut Them Down

Lawsuits Are a Big Business—Here’s How to Shut Them Down

2 min read
Scott Smith

Scott Royal Smith is an asset protection attorney and long-time real estate investor. His law firm, Royal Legal Solutions, helps thousands of real estate investors and entrepreneurs in all 50 states protect more than $1.2 billion in assets. Since 2014, he has published over 1,000 posts and articles on BiggerPockets and has appeared on hundreds of podcasts.

Experience
Scott fell in love with real estate when his commercial property investment allowed him to graduate from Albany Law School debt-free. He immediately began practicing at the trial and appellate court with the district attorney, placing him in the top 1 percent of lawsuit attorneys in the county in terms of professional experiences. He also worked in private practice, suing insurance companies for denying valid claims (which is surprisingly common!).

After his friend lost $3 million in real estate from a single lawsuit, despite having ample insurance, Scott dedicated himself to educating real estate investors on the importance of affordable asset protection, specifically when it comes to folk knowledge and misconceptions that still exist in the investment and legal community. The solutions Scott recommends for his clients are the same ones he originally created for himself and has been refining on his mission to help people protect themselves from frivolous lawsuits.

Follow Scott as he deconstructs the litigation game and shows you how to free your time, protect your assets, and create wealth that lasts for generations.

Press
Scott regularly appears on shows with folks like Grant Cardone, BiggerPockets, Entrepreneurs on Fire, Wheelbarrow Profits, and his own real estate investing podcast. He frequently interviews industry experts on his Facebook and YouTube accounts and has published thousands of posts and articles on BiggerPockets and his blog for real estate investors.

Education
Scott graduated from Albany Law in 2014.

Accreditations
He has passed both the Texas and New York bar exams.

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As a real estate investor, you have to understand that lawsuits are a business. If someone is looking to sue you, they’re looking to get your money. A solid asset protection strategy keeps people from finding out what you own. And if they try to sue you, it limits what they can get from you.

A great asset protection strategy exhausts your opponent’s will and their resources and keeps them from continuing with the lawsuit. In most cases, it stops the lawsuit before it even starts or (at least) encourages the plaintiff to settle early.

How Do I Protect My Real Estate Investments?

You get a proper asset protection strategy.

A proper asset protection strategy prevents your assets from being seized by somebody via a judgement. It makes people (attorneys) believe they’re not going to get anything out of a lawsuit.

Lawsuits are only paid for in two ways: Either the plaintiff pays an attorney to sue or the attorney takes the case on contingency.

Related: 4 Asset Protection Strategies Every Real Estate Investor Should Consider

Let’s say I’m an attorney who wants to sue you. While researching, I find out you’ve qualified for food stamps for the past five years. How much money do you think I’m willing to risk for a judgement which is merely a piece of paper? Without an asset to seize, a judgement is worthless.

If their side researches the real estate investor (you) and finds no assets on paper, no attorney worth his salt is ever going to take a case like that on a contingency. Contingency is free for the client. The attorney risks everything. That’s why attorneys only file cases that they are very confident they can win and collect on.

So, when you ask yourself, “How do I protect myself from a lawsuit?” what you should really be asking yourself is, “How can I make it seem as if I don’t own anything?”

Asset Protection: Make Litigation a Nightmare

If anybody looks to sue you, you want to look like you own nothing. You want to make it impossible for them to try to come after you. One of the ground rules of asset protection is that you need to make litigation a nightmare for them.

And what does a nightmare in litigation mean? It means risking thousands and thousands of dollars with only the smallest hope of being able to get money out of you, the investor.

Related: Buying? Selling? New to the Business? Why You Need a Lawyer Now

Now ask yourself, as an investor and as a business person, do you go gamble in Vegas expecting to win big? Probably not, and neither will an attorney asked to take the case on contingency. Most attorneys will take only guaranteed wins.

When we make it a gamble for them to try to come after your money, they just won’t do it.

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Do you have an asset protection strategy? 

Tell us your thoughts in the comments.