Unfounded Presumptions


I had a middle-aged physician in my office last week. She had just settled a lawsuit that
was perfectly defendable, but the insurance company didn’t want to go to trial because it
would have been more expensive than just settling the claim.

So, she had been talking with her physician buddies who told her that they were all putting
their houses “in trust” to protect them from patient claims.

When I told her that trusts do not protect houses, or any other asset, she was shocked.
“But, everyone is putting their houses in trust,” she told me. “Yeah, and they are going to
lose them if their insurance fails,” I answered.

Her presumption, based on information from physicians, not lawyers, was that trusts are
protective, just because a lot of people whom she respected said that such was the case.
A day later a young woman came to visit me. She has been married about two years and
has a six-month old son. Her husband owns a business that he had before they were
married. She owns stock in a corporation run by her father that is worth millions. So, Dad
had insisted that she and her soon to be husband sign a prenuptial agreement. When I
explained that prenuptial agreements don’t work very well in California, she was shocked.
The problem is, of course, that the statute dealing with those agreements starts out by
saying that, “Prenuptial agreements are NOT valid, unless . . .” and then makes a rather
extensive list of hard to comply with demands.

Both of these really great people were operating their lives based on erroneous
information. While there are ways to isolate assets, like a house, so that creditors cannot
take them away and to handle isolating separate property in the presence of a marriage
(we do this all the time, but not with prenuptial agreements), a lot of the time, we operate
based on error, sometimes generated by lies. As parents, we all thought that our school
districts were doing a credible job of “educating” our young.

The solution is just a short visit away – but with an expert. It costs a few dollars to ask, but
please ask someone who has nothing to sell and is licensed and insured for the answer.
Once my young friends understood that more extensive structuring was required, in each
case, they were happy to take those steps. If they had acted on their first information, the
exposure could have cost them everything they have worked for.
Come see us and let me tell you how it really is.