Is That Even Legal?
Is That Even Legal?
Sins of the Children: Your Kid's Actions Can Destroy Your Wealth Unless You Protect It
In Arizona, the 'Gilbert Goons' have grabbed headlines - sending fear and concern throughout a traditional suburban community - a case where teens are charged with violently attacking others.
When things like this occur, one of the overlooked aspects of the legal system is this: THE LIABILITY OF THE PARENTS.
The assets of the parents of the alleged assailants are often highly at risk. Is That Even Legal?
Meet Asset Protection guru Ike Devji. His clients have seven billion dollars under his guiding hand. In his interview with the incredible Bob Sewell, Here are some highlights:
From the moment you become a parent, your risk profile changes, and it is never too soon to consider asset protection.
Often, the children of affluent parents have access to choices and property that can elevate risk for their parents.
Parent's should always we aware of their insurance coverages, their business interests and risks and explore legal advice on how to protect their assets.
Your child may never cause an accident, join a group of "goons," or otherwise incur large financial risk for your household, but those who are prepared, preserve their wealth, says Ike.
Is that even legal? It's a question we ask ourselves on a daily basis. We ask it about our neighbors, we ask it about our elected officials, we ask it about our family and sometimes we ask it to ourselves. The law is complex and it impacts everyone all the time, and that's where we are here. I'm attorney Bob Sewell, and this is season five of the Worldwide Podcast that explores that one burning question. Is that even legal? Let's go. We're welcoming back today Ike Devji. Ike is a preeminent asset protection attorney. He's known all throughout the United States for what he does, which is asset protection. He helps his clients manage well over a billion dollars worth of assets.
Bob Sewell:Ike, welcome to the show, thank you Good to be with you, so I wanted to have you on, because there's a story in my hometown, gilbert, arizona. It's got some national attention but it's also been flaming hot here in the valley. They call it the Gilbert Goons and what's interesting is just a brief history. Is the Gilbert Goons mostly affluent, mostly white, mostly some sort of religious affiliation, and they are, they were, are were going out and randomly targeting kids in a gang style if not a gang beating them up and then afterwards threatening them if they were exposed and and threatening more retaliation if they have any sort of repercussions against them. It was really ugly and it culminated when some of these kids decided to go out to a party in a neighboring town and they beat a kid up so bad that three days or two days later he died, he succumbed it. Absolutely tragic results.
Bob Sewell:And now you know and it appears that you know that a lot of people knew they, they gave themselves the moniker Gilbert Goons and and they were active on social media. They posted things on social media. I mean how they weren't arrested in advance, I don't know. But what's amazing to me now is the repercussions to the parents. Now their parents are incurring real consequences for their children's action. Is that even legal?
Ike Devji:Absolutely, absolutely. And look, parental liability is nothing new. And so let's have this discussion about parental liability in the context of the Gilbert Goons right, and it could easily be the Scottsdale Stranglers or the Phoenix felons or anything else. So there's nothing particular about Gilbert as a community that I think is is unique and created these kids and their gang and their problems and the heinous acts they did and the tragedy of the death of Preston Lord that resulted from that allegedly. But every year I put out a warning that's nearly identical and I put it out just before spring break, and what we talk about there is the idea of parental liability in the context of the hundred deadliest days of the year, the time between Memorial Day and Labor Day, where we see the highest number of fatalities, injuries, accidents, things like that. Because kids are out for the summer, they're on spring break, they're on summer vacation, and this is grade school children, high school children and even college-aged children who might be adult-aged are coming home, they're using their parents' homes, cars, boats, cabins, atvs, right, and so all of that activity their partying, their driving more, their spending more time on supervised creates very significant liability for their parents. But parental liability goes way beyond car accidents, which is the number one thing that most people, especially the parents of teenagers, are worried about, and rightly. They should be right, because anybody who has a teenage child in their home and doesn't have a $2 million umbrella on their car whether you make a hundred grand a year or $2 million a year or something more than that you're insane. I mean, that is the most basic thing that you would do to protect yourself.
Ike Devji:But we have seen parents become liable for their actions, of their children, for many different things.
Ike Devji:We've seen it for bullying, cyberbullying, assault, theft, vandalism, sexual assault, breaking and entering, throwing parties in a vacant home in a gated community in North Scottsdale and doing six figures in damage to the home when you have 200 kids come in and have a party.
Ike Devji:So this liability takes many different forms and this is just an echo of that.
Ike Devji:And what have we seen here in Arizona with the Gilbert Goons? Well, we've seen I saw one report that said that one of the parents has lost their business and had their franchise pulled because of the negative association with this whole event and these children. We've seen I'm aware of at least two people who have been laid off, if not terminated, for their employment because of their association with this. And now my understanding is that there are at least two attorneys in town that are filing multiple lawsuits against the parents of these children for damages for whatever they have done, and those claims obviously will be different depending on what exactly each child is accused of or there's proof of them doing. And then at the top of that, add the legal fees yeah, whether I think it is natural for every parent to want to protect their child, even if their child has done something bad, and a lot of these people are going to be digging deep into their savings into their retirement funds into their home equity.
Ike Devji:And spending six figures on legal fees to try and minimize the penalty that these children are going to face, and in some cases, these parents are going to be spending on six figures and defending themselves against the lawsuits that are coming.
Bob Sewell:Now, there's no better fee than a legal fee. Okay, so we don't want to disparage the legal fees. No, I'm kidding, but it is. I mean part of me, the vindictive part of me, says, well, these parents got what's coming to them. And then the other part of me says, well, I don't know, I wasn't in that house and I didn't have their life experience. But then the other part of me says I really could be held liable for what my kid does. I mean really.
Ike Devji:Yeah, look, I look there's. I absolutely understand what you're saying on both sides of that, right. On the one hand, we want to make sure that this never happens again. Right, that there are a group of teenage, you know, young adult, mostly males, that go out and terrorize a community and beat up other children and kill a child and do property crimes. That obviously not acceptable.
Ike Devji:And the parents involved there's their layers, right. Their degrees of some of them had no idea their children were doing this. Some of them maybe had a little bit of an idea and thought it was harmless. Some of them were fully aware of it and ignored it. Some of them are aggressively defending the actions of these kids that are indefensible, right, right, so we range from clueless to complicit. Yeah, and are all of those people equally liable? Should they be equally liable? I don't know, that's the decision for the courts to make, but my job as an asset protection attorney is to look at anybody who comes into my office and say, oh, you've got 14-aged kids in your house. Are they? Do you have proper insurance in place, right? And to help them manage that risk, whether it's an accident or whether it's something more intentional like we're talking about in this context.
Bob Sewell:And I yeah, I should have thought of it that way before I even posed the question. Because whether or not they should be liable doesn't matter. Whether or not, because if, from your perspective, we all know what's going to happen If attorneys, where there's an injury, attorneys find a remedy, and the remedy is with the person who has the money, and hence we need asset protection.
Ike Devji:Absolutely, and I have a list of risk factors that I walk my clients through and it's not a complete list but it kind of boiled down to hey, here are 12 or 13 of the most common things that I see, and one of those is do you have children? That's one of my risk factor list, and are those children using your homes, using your cars? Do they drive? We look at all of those details as part of this, and one of the other questions is are you a target? Because you are collectible? There are two kinds of people that lawyers don't sue people who don't have any money or people who have money they can't reach. I think we would all prefer to be in that second category and if it was my child that was injured, I would aggressively want to punish the people who were responsible.
Bob Sewell:Oh heck yeah.
Ike Devji:There's no doubt the moral outrage that these parents and these communities feel is totally justified. I also can put myself because I guess of what I do for a living in the shoes of the innocent parent who has worked their whole life to build a business, provide for their children. Do all the things that we, that you and I hear parents say, oh, I built this business because I want my kids to have what I never had, or I want, you know, I want to make sure my family's provided for right and should that person lose everything because of something they didn't do and weren't aware of? And how do we make sure that that doesn't happen? Right, which is what? Which is what's my job? And so when I look at these things, you know, we've warned people that sometimes, especially with affluent people and this, this community, is considered-.
Bob Sewell:So it has a lot of affluent people.
Ike Devji:Considered to be an affluent community. It's at minimum. I think it's described as an upper, middle class, upper class community, whatever that means, and sometimes people are wearing the emperor's new clothes and they assume that because we live in a certain zip code or we have a certain income or we go to a certain church or whatever.
Ike Devji:The factors are not my kid. My kid would never do this. Our children aren't involved in this. We don't have these problems.
Ike Devji:And as someone who works primarily, almost exclusively, with high net worth individuals, I will tell you that those kids get in trouble as much, if not more, than, anybody else's kids, and in some cases it's simply because they have access to things that allow them to do harm. Cars, homes, boats, atvs, money, yep right, those things can all facilitate behavior that leads to problems. You know, and we talked to you. So somebody asked me recently.
Ike Devji:I said well, what do you do? How do you protect yourself from being the next Gilbert Goon's parents? And I said well, the first layer of that protection is something that Bob and I, or any other attorney and I, can't teach you. That's good parenting, it's management, it's leadership, it's being involved in your children's life, it's being aware of what they're doing, it's monitoring their social media usage, it's setting rules for the use of your car, your home, your boat, your cabin, your property and enforcing those rules. Because sometimes, when a parent will come to me and say we had this liability or that, and I'll say, well, what have you do? Or how did you punish that child? Or what have you done to limit their ability to do this again? And the thing I sometimes hear is he just won't listen. Yeah, yeah, right now, there is nothing I can do about that as an attorney.
Ike Devji:So the first layer of protection is always the family, the parents being involved, keeping an eye on things and forcing rules. The next layer of protection that we want every parent to have in place is a very high limit of insurance. Have that umbrella policy on your home and your cars. Have the best umbrella policy available. That is not the cheapest one that you went online and found, but the one that covers the most things, including perhaps some of the actions of your children, things like bullying, cyberbullying, some of these other things. There are umbrella policies that can cover some of those.
Ike Devji:And then, finally, let's have our assets organized from an estate plan to an asset protection plan in a way that makes those assets legally distinct from any personal or professional liability that we incur in the future.
Ike Devji:Let's make sure that we're in a position where we have locked in every level of success and we have made that success, whether it is in the form of an income stream for a business or the ownership of a piece of real estate or money in the bank. Let's make sure that those things are well compartmentalized and out of the reach of whatever may happen, this risk or any other. And that's good basic planning that we do as asset protection attorneys. That is our primary responsibility, because we never know where this risk is coming from. Yeah, it could be an employee lawsuit, it could be an investor lawsuit, it could be a business deal gone bad, it could be a construction defect claim for a builder, it could be a medical malpractice claim for a doctor, or it could be one of your kids goes out and does something stupid that you weren't aware about and it cost you your savings and your retirement.
Bob Sewell:Yeah, and the thing that I've learned from you how long were you known each other? 10 years, it's gotta be At least. Yeah. And the thing I've learned from you is, when it comes to asset protection, you don't just get these things out of the cracker jack, the cracker jack cracker jack's box. You don't just order it up on the internet.
Bob Sewell:It involves carefully looking at your assets, at your potential risk, with your attorney, then organizing these things in a very particular way for you and you alone, right. And then layering it with insurance and whatever you else you think you need to do, and then comparing, you know, your risk to your level of how much. You know how you say, okay, I feel this level of risk is it was okay for me, or I'm okay losing this and or spending this in taxes, or losing control of this or not losing control of that, all those factors is sort of like a I envision if I, if I wasn't you know the type of guy that had to really strategize about this that it would be I'd come to you as my, my true counselor, my mental health therapist for my assets, right, and that's what you do, right.
Ike Devji:Yeah, I mean all of those factors that you mentioned are part of the calculation, and what is the right tool or how much is enough, or what's good enough for this person, right? So somebody who is retired and has a significant amount of wealth should have some asset protection planning in place, because they're not refilling that bank account anymore the same way that they used to, right? But their risk level is certainly much lower than my entrepreneur client who's actively running for businesses, right? Right? So those two people might have identical net worths, but they need different planning. They also have different needs in terms of access.
Ike Devji:So one of the most effective forms of asset protection that we could ever conceive of is one of the simplest, which is let's say, I have $5 million and I put that $5 million in an irrevocable trust for Bob. It is forever out of my reach and control. A third party trustee controls that trust and if I get sued for anything going forward, that money that we put into that trust for Bob before this bad thing happened is unreachable. That works, yeah, that works. The problem is I no longer have my $5 million that maybe I needed, wanted, needed to use it, that capital to generate more income, maybe needed to reinvest it.
Ike Devji:Maybe I'm not financially at the point where I can make those kind of large gifts and cut that out of my use and control forever right and even my wealthiest clients, often mentally even though financially they can do it mentally aren't there yet they're not ready to give up control and just say that wait a minute. I spent 20 years earning and leveraging up to buy this office building that I'm putting into this trust for my kids and I can never touch it or use it or get a dollar out of it again or control anything that happens to it, and I have to put that in the hands of a third party trustee. Some people are ready for that. Some people are not right. Some people need a greater degree of control.
Ike Devji:Some people need to be able to have investment funds that they they get a call on a Monday about an opportunity on a Tuesday and they need to be able to write a check the same day. So all of these factors, all of these unique things, are part of the calculation that goes into what's the rights tool set for this person Right? Right, Because there are many ways to achieve the same result. From the lawyer's desk, they're all kind of the same, but from the other side of the table, with the client, the person whose money it is, it's very, very different, and is it?
Bob Sewell:and then the other part of the counseling is oh, you're a parent and do you have boats, do you have ATVs, do you have side by sides and do you let your kids do these things by themselves? And well, you're living a more risky lifestyle, you know.
Ike Devji:Absolutely. In fact, I have a questionnaire that I use to help figure out what a person's risk factor is when I'm working with them as a client, what their risk factors are. One of them is children. And then, exactly as you said, how many vehicles are in your home? Who holds title to those vehicles? Is it you and your spouse, or does one of the kids drive a car that's leased by your medical practice because you're getting a tax write off?
Bob Sewell:Yeah.
Ike Devji:Right. So you're taking the most dangerous thing that you do every day, which is pilot your four or five thousand pound missile between everybody else's on the one on one, and you're linking it to the thing that provides your family's income and is the most valuable thing you own, right? So we do ask those questions and we ask what toys do you have? Boats, planes, rvs, etc. Etc. We ask about do you have vacation homes? We ask about how much insurance you have in place and, like I said, two million is the starting point, even for regular, everyday working folks, in my opinion, right now, because, look, if you kill or injure somebody in a car accident, a million dollars isn't going to cover it anymore.
Bob Sewell:If they have a permanent injury or a death, and just the property damage alone.
Ike Devji:I mean, every new car on the road these days is ridiculously expensive. Yeah Right, you can go get a new soccer mom Mabel, a new Tahoe, and that's close to six figures. Yeah Right, so that million dollars was a big number in the 1970s, yeah, and it's a much smaller number in 2024. Yeah, and so we look at all those factors, you know, and, as I said, this is a tragic case that has many different factors, and some of these parents were fully aware of it, I'm sure, and some of them were completely unaware that their children not only was their child doing something, but was even capable of doing something like that.
Ike Devji:Yeah, and that's the problem that we have with parental liability, and in Arizona we have statutes that say a couple of interesting things. Number one it says that parents are liable for the actions of their children if you have custody of your child. And the second thing it says is nothing in this statute shall require an insurer or shall prevent an insurer from excluding intentional acts of their children. So you might have that insurance in place and if your child intentionally assaulted, somebody drove a car into them, participated in street racing and the street takeovers that we see on the news and you see them on Tik Tok, where the kids pull into an intersection. All of a sudden there's 300 people standing there and they're doing donuts and somebody gets run over invariably.
Ike Devji:Yeah, they can. Your insurance coverage could potentially exclude something like that, which puts that bill right on you and your house and your savings and everything else that you've ever worked for. So these are issues that, like I said, can be wide ranging and in most cases it is an accident. It is not very common that I, at least, have had to deal with intentional acts. Like I said, we've had those bullying acts, those bullying claims and cyber bullying and fights and assaults and theft and vandalism, all of those things, but the biggest and most regularly recurring exposures are accident based.
Bob Sewell:Yeah, If I'm a parent, I'm looking, hearing this conversation and I say you know, I need to do some massive protection. I have a business, I have more multiple businesses. How am I going to get ahold of you?
Ike Devji:The best way to find me is probably just through my website, which is wwwproassetprotectioncom. P-r-o. Asset protection we have. You'll be able to find all my contact information there. You'll also be able to find a bunch of easily accessible information on all of these topics I've written.
Ike Devji:I've been doing asset protection planning for 20 years as you said I protect, help protect well over $7 billion in assets for clients all over the country. So what I've tried to do is give those I work with perfect 2020 hindsight, where I've every time something bad happens that we, that is a risk that we can manage or risk to be aware of, I write about it. I say, hey, this thing happens and it happens repeatedly, and so all of that information is there as well at proassetprotectioncom.
Bob Sewell:Our best to the families of the who were victims of the Gilbert Goons and uh Ike. Thanks for coming on the show, but if you need some legal advice, get some. There's some great lawyers out there and we are always ready to help. See you next time.