top of page
  • Writer's pictureTimothy M. Foster

Why is Litigation out of Control in Our Country? Who’s to Blame? How can You Protect Your Business?

– Why is litigation so rampant in our country? I’m asked that question all the time. My response after decades of working with hundreds and hundreds of business owners in 47 states, should be eye opening to all business owners. And it’s this; too many businesses keep the welcome mat out just inviting litigators in their doors. How? Lack of planning, bad, planning, and misinformation that leads to bad decisions is at the root of the problem. What we see are too many single entity companies that own of assets, cash, inventory, and real estate – unnecessarily making you and your company an enticing target for litigation. Compounding the problem is the business owners universal misunderstanding of how and why to follow corporate formalities and inherent problems with comingling between business and personal assets. . To put it simply, if you don’t respect the integrity of the corporate structure – no court is going to force a perceived injured or aggrieved party to either. These issues result in not only business assets at risk, but also personal assets are at risk to litigation. How do you and your business avoid this result? Proactive, informed, and knowledgeable planning – just like the Big companies. We understand how to do this – we have the case law to prove what models work. I spent 15 years working for Fortune 500 Companies creating and maintaining cutting edge asset protection strategies that protecting the company, assets, and shareholders from the never ending litigation. I’ve spent the last 15 years perfecting this type of planning for privately held businesses and the hard working folks that own them. It’s certainly clear to see why privately held, small and medium sized businesses are such an enticing target for litigation.

If you’re not doing this type of proactive asset protection planning you are at risk – Unnecessarily! Is it finally time to stop rolling the dice? And if you think more insurance is the answer – STOP - we need to talk before it’s too late.

The Best Legal Defense – Make yourself and your Business Unattractive to Litigation

Most business owners that I meet are surprised to learn that just because they operate their business as an incorporated entity or an LLC, their business and personal assets are NOT “automatically” and “fully” protected from business or personal litigation. Ignorance is bliss, but getting a hard reality check from the hungry litigators in an overpopulated legal system is a difficult lesson to learn. Take note – if you’re not prepared – the legal system can be brutal and unforgiving.

We get too many phone calls from business owners that are facing litigation from an event that’s already happened. “What can I do?” At that point, you can’t do much – hire the best defense attorney you can find, and hope you survive it. These are difficult calls to take, because the critical fact is that asset protection must be proactive – meaning it must happen before the accident or event that caused the litigation. Any changes to entity your structure, ownership of assets, ownership of the business, or movement of cash will be rewound by the courts to exactly how things existed at the time of the accident.

The stories are eerily similar. It was an employee that had been with me for 20 years and never had an accident. He was having a bad day at home – that led to distracted driving and while he was looking at a text message, crossed into the other lane and then disaster occurred. Talk about a life changing event for everyone involved. Someone needs to pay for this! The courts look to YOU the “deep-pocketed” business owner of course!

I have heard so much bad and misinformed advice given to business owners on this subject. Think about it, if asset protection strategies are used by and work for “big” companies, why won’t they work for you. We have decades of case law and real world examples that demonstrate how asset protection strategies should be implemented and how these strategies will be viewed by the courts.

So maybe now, you’re starting to better understand the answer to the question - “Why is litigation so rampant in our society?” No doubt there are a lot of attorneys out there, but the real reason is that privately held companies are very attractive targets to litigation! The majority of business owners operate their business with business assets, real estate, buildings, inventories, receivables, and cash exposed to litigation. And most of those also risk personal assets because of errors or omissions with their corporate formalities compliance. Both of these unfortunate situations are avoidable – with education and strategic asset protection planning. And please, don’t be fooled by the fact that your business assets are nearly fully depreciated – if you lose assets in litigation – the real cost is “replacement value” of assets. Remember – you can’t operate your business without assets. Book value is meaningless.

Why a Comprehensive Asset Protection Strategy Critical for Your Business

The solution is strategic asset protection strategies and entity structure planning that combines all relevant business, tax, and legal ramifications and considerations. We’ve had clients that have gone to an attorney that proceeded to set up too many companies or LLCs that required too many tax returns each year and was just too cumbersome for the business to keep track of. The good news is that there are much better ways to do this. We also have clients that tried to do it themselves and have found out the hard way that their planning would not stand the test of litigation because of issues with the entity structure, ownership of assets, real estate or equipment leases, etc.

A well designed strategic plan can effectively provide tax saving opportunities and benefits AND legal asset protection benefits – while at the same time being manageable for your business to implement and work with on a day to day basis! This type of planning helps more effectively build your wealth and increases the market and lending value of your business. Talk about a win-win situation. Benefits now and in the future!!

Call me – we can help! And yes, it’s finally time to get this planning done! We’re happy to talk to you about our experiences and confidentially discuss what opportunities might be available to you. Talk to an experienced expert – not a salesperson!

Call us for a confidential consultation.

Timothy Foster, JD, MS Taxation

Managing Member

3Pi Group, LLC

3PiGroup, LLC and Plan My Business Exit, LLC are professional services firms dedicated to providing superior individualized and custom service to individuals and their businesses in the areas of sales enhancement, asset protection, tax planning, exit strategies, and wealth building. Simply put – we want to educate you on all relevant opportunities to put more dollars into your pocket, your business and your future.

We focus on leading edge, sophisticated, and safe business strategies that will help business owners structure, operate and maintain their business to take advantage of business and tax laws rather than being encumbered by them. We partner with the business, the accountant, and the attorney to ensure the business owners are capturing all available benefits that align with their business and personal goals.

Call Us Toll Free: (888) 938-2975 Email:


bottom of page