What Is Risk Management?
Before providing a definition, let's pull the lens back and take a 30,000 foot view of an individual's financial and legal life. There are several events which can negatively impact their financial well-being. In general, these are bankruptcy, litigation, divorce, physical/mental incapacitation and death (this actually impacts the decedent's family, but it can still harm a family financially if not dealt with properly). Risk Management looks at each of these events, and then asks this fundamental question: "how can we mitigate the financial damage these events have the potential to cause?" Or, put another way, risk management is the legal discipline of mitigating , or attempting to mitigate, the negative impact of various financially and legally catastrophic events. As should be obvious from the previous list of events, risk management "law" actually involves small and large pieces of a number of different legal disciples, but being chiefly comprised of estate planning, debtor/creditor law, business entities, tax law and litigation. It also helps to have at least a basic knowledge of economics and financial dealings, if not a full-fledged thorough understanding thereof. And, some grounding in international law (especially taxation) will probably help. In short, risk management is really a hodgepodge of various legal concepts and ideas.
What Does Risk Management Involve?
There are several legal disciplines involved with risk management.
Asset protection primarily involves asset ownership structure. In essence, we work to make it difficult for others to seize your assets. The asset protection section of this website explains some of the tools we more regularly use.
Estate planning primarily involves the art of minimizing the effect of your death on your loved ones. The estate planning section explains some of the basic concepts of this area of law.
International tax is used when a transaction involves two or more distinct countries. The international planning section of the website outlines some of the more common concepts.
Captive insurance is a wholly owned insurance subsidiary used to insure risks of the parent corporation. F. Hale Stewart is the author of the leading legal text in the field: