| >> Because the rich like them. Because smart people like them. Those smart people use them to protect their own wealth, and often end up as advisors to rich people. They certainly work for rich people, yes, but they also work for average people who have accumulated enough that they want to reduce the risk of losing it. >> So why is the answer "allow people to avoid their liabilities" That's a somewhat inaccurate characterization of what they do.
Firstly, liabilities don't exist in a vacuum. They exist because a creditor agrees to extend you credit under specific terms and conditions. That credit entails risk to the creditor, which they allow for, and charge an interest rate to cover. They go into this understanding the parameters of the loan, and the risks / rewards in making it. Financial structures allow you to limit the boundaries of that transaction. They allow you to decide what is "in" and what is "out" of the transaction. By contrast lumping all your assets and liabilities together makes you a juicy target for aforementioned unscrupulous characters. >> instead of "don't give people liability to greedy or unscrupulous characters"? Because you cannot control this. If you have a bank loan, of any kind, you already breaking this rule. Banks are some of the worst offenders when it comes to bad creditor behavior. If you rent a building or premise from someone, and that someone sells to a new person, well, congratulations that new person just entered your personal or business life. >> Personally I don't want to dismantle the system as it favors me* Absolutely. Banks and corporations already have the deck stacked well in their favor. I'm a big fan of any part of the system that protects me from their predatory clutches. |
How does this relate to the actual article here, where somebody dies, a court determined that person X was personally responsible, and person X may or may not (we don't know) be using a trust, corporation, or other paper entity to shield himself from having to pay what he owes?
If that's just "the system" then we are saying the system is wrong. You're saying "smart people" use this system, and we are saying those smart people are the unscrupulous ones, taking advantage of the letter of the law to dodge what they owe. You shouldn't be able to use a structure of paperwork to avoid paying a judgment or fine that stems from wrongdoing. The corporate veil should be much more pierce-able than it apparently is.