California is a great place to live and enjoy the outdoors, but it turns out it is a difficult climate within which to run a business.
California ranks 47 out of 50 in the risk of litigation, one of the worst states in the nation. (OC Register, Jan Norman) (Ron Trujillo, Los Angeles Business from bizjournals). To get some idea of the scope of the problem let’s look at some statistics. Based on numbers gathered in 2004
- 94 percent of all lawsuits in the world are filed in the United States
- 70 percent of all the lawyers in the world are in the United States
- 41,000 lawsuits are filed in this country every day
- Over 15,000,000 lawsuits are filed nationwide each year, and
- California accounts for 28 percent of the national total of lawsuits filed each year, that is around 1,400,000 lawsuits.
It can be argued that the system is broken and that one of the first steps to fixing it is better laws, a more balanced approach, and tort reform. But in California “State legislators have done nothing to fix the problem. . .As a result, California businesses are easy targets for personal injury lawyers, costing jobs in the process.” (OC Register, Jan Norman).
Business owners can’t afford to ignore the problem or wait for a legislative solution and they don’t have to. Every business owner should consider whether asset protection planning makes sense for their situation. Asset protection planning is about leveling the playing field and building defenses for your business and personal wealth against unscrupulous plaintiffs and meritless lawsuits. It is not about evading creditors and has nothing to do with evading taxes, but it is about pushing back against the litigation assault businesses face in California.