A few years ago a client of ours, Simon Thorn, got into an auto accident. Mr. Thorn, who was 75 years old at the time, was making a legal left turn at a light. He did not notice a motorcyclist in an oncoming lane, who skirted traffic on the far-right side to beat the red light.
The motorcyclist crashed into Mr. Thorn’s car and was severely injured. Even though the motorcyclist was partially or mostly at fault, he filed a lawsuit against our client seeking damages in the amount of $3 million.
Mr. Thorn’s automobile insurance policy covered $100,000 in damages and he had no umbrella insurance. He had no assets except his home, with a $1.5 million equity, which he desperately did not want to lose. The California Homestead Exemption covers up to $175,000 for someone of Mr. Thorn’s age, leaving most of the equity reachable by the plaintiff.
Mr. Thorn came to us without much hope, but we were able to provide a creative solution.
We structured the sale of his home to a friendly third-party with a lease back by the client. The sale proceeds were deposited into an offshore asset protection structure. The plaintiff settled the lawsuit for $120,000.