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Asset Protection Privacy

Asset Protection Privacy Issues

How does a potential plaintiff find out whether you have enough money to make you an attractive lawsuit target? Thanks to the Internet, a lawyer can find out everything he needs to know. Recent advances in computers and Internet technology allow unprecedented access to your most sensitive personal and financial information. Detailed information describing all of your real estate and business interests, the name of your bank and brokerage firm, your account balances, and your transaction history can be accessed and assembled without your knowledge or permission. Now, anyone can find out what you have and how much you are worth.

These capabilities are a new phenomenon. Until recently, separate bits and pieces of information about your life were scattered in dusty file drawers and county records around the country. Your birth certificate, driving records, insurance file, marriage licenses, and loan applications were maintained or stored in written files, record books, or sometimes the computer at the office where the records were kept. Information could not be accessed from outside the office where the records were stored.

If you or somebody else wanted information from your birth certificate, you had to physically go to the records office in the county where you were born and look through the indexed records. An investigator attempting to assemble information about your life had to travel from one county courthouse to another, stand in line, search through library archives and public records, and hope to come up with some useful information. The process of gathering personal information was a laborious and expensive job.

But all of that has changed. The scraps of paper and the written records have been converted into an electronic form which can be stored and searched by a computer. And these computers and databases have been connected through the Internet so that the information in any one computer can be accessed and searched from any other computer. If somebody wants to find out information about you, a single query will hunt through billions of documents stored on thousands of interconnected databases to produce a frighteningly thorough profile of your life. An investigator can now sit in the comfort of his or her office with a computer, a modem, and a cup of coffee in one hand, and in minutes, access everything he or she wants to know about you.

Searching for Your Real Estate
Anyone wishing to put together a complete picture of your assets will first locate and value any property which you own. Until recently, a comprehensive and accurate search such as this was difficult or impossible. Even six or seven years ago there were no statewide or national database listings of real estate owners. Deeds to property were filed in the recorder’s office in the county where the property was located. The deed was manually indexed by the clerks. If someone wanted to find out what property you owned, they would have to go to the local recorder’s office and look in the Grantee Index under your name. (Grantee is a legal term for the purchaser in a real estate transaction.) That index would show any property, located in that county, which had been deeded to you. Property in a different county would not be found in that index.

An investigator attempting to find all real estate which you owned had the daunting task of searching the index for every county. To make sure that all of your real estate was discovered, an investigator had to search every county in the country. He, or someone working for him, had to personally go to the recorder’s office to look up the information. If he had good sources, he might be able to call on the phone and get a clerk to check the records. In either case, it was a time-consuming, expensive, and inefficient process.

It doesn’t take luck anymore to find somebody’s real estate. Almost every county has computerized its records, and the information has been linked to a national database. Instead of visiting every county recorder or trying to guess where property is located, with a single query, a computer search retrieves all of the real estate records in your name—compiled from every state and county in the country. The report identifies the cost of the property, the loan balance, and the type of property. This information is produced in minutes, and the cost is nominal.

Case Example
About fifteen years ago, we had a client who was trying to collect a $1 million judgment from a former business partner we’ll call Jake. Wisely, Jake was staying out of sight to avoid our subpoena. We wanted to bring him into court for a debtor’s examination to make him tell us what he owned. We knew he had substantial assets, but we couldn’t find him or any of his property. A search of all of the county real estate records in Los Angeles—where he lived—and each surrounding county showed nothing. Since there was a lot of money involved, we paid thousands of dollars to search every county in California, Nevada, Washington, and Oregon. Still nothing.

One day, after five or six years of basically futile efforts, we received a call from a former secretary who used to work in our office. She had left the firm to open an art gallery in Vail, Colorado. “Are you still looking for that Jake guy?” she asked. “I just saw him on the ski slopes.” That was a great tip. We checked the county records and found a house in his name that he had purchased for $3.6 million in cash. We immediately entered our judgment in Colorado and filed a lien on the property. Jake settled quickly and our client ended up with about $2.7 million, covering the judgment, interest, and court costs. Jake had figured we would never find the property, and without our lucky break, he would have been right.

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