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Old 08-11-2010, 11:14 AM   #81
ziggy29's Avatar
Join Date: Oct 2005
Location: Texas
Posts: 15,419
Originally Posted by FinanceDude View Post
Folks in occupations likely to get sued should have proper E&O or malpractice insurance to cover them. Similarly, folks should have a minimum of $2 million in umbrella coverage as part of their financial house.............
Agreed. But if they have $5 million in coverage, what's to say they won't be sued for $10 million? We've seen some pretty wacky jury awards (many of them, I assume, are reduced or overturned on appeal). I would agree that we're dealing with low odds here, but it is possible and some people may lose sleep knowing it's possible.

Some people want to bullet proof their asset protection as much as they can, and there's no way to buy an umbrella or a professional liability insurance policy with "unlimited" coverage. So shielding some of your portfolio from being seized is a valid tactic in a few cases (and in a few states). Maybe they are likely better off in a taxable account that is vulnerable to an (unlikely) event where the judgment exceeds their insurance limits, but not *all* of financial planning is by the numbers. The financial plan that's optimal in the average or typical case isn't much good if the client isn't comfortable with the leftover risks they are exposed to. And sometimes no amount of "running the numbers" will convince them otherwise.

"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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