Concepts of Asset Protection

1st concept: Judgment creditors can only take from you what you own. If you don’t own something, they can’t take it! Seems simple, but so is the law of gravity. But it has profound impact on how most asset protection techniques work.

2nd concept: No country in the world automatically recognizes U.S. judgements. Period. Think about that: No country in the world automatically recognizes U.S. judgements! To register and enforce a U.S. judgement abroad, a case must normally be re-litigated in a foreign country (and, no, you won’t get a contingent lawyer over there, it’ll cost a lot of money). Since no country in the world automatically enforces U.S. judgement, (it’s very, very expensive and, indeed, normally, fruitless to attempt to enforce a U.S. judgement abroad) that’s because most countries think our tort, securities and anti-trust laws are absolutely absurd. Also, no one country in the world automatically enforces our tax or most governmental type awards. They just simply think our laws are stupid and unfair. This is one of the main reasons that asset protection trusts are effective and work.

3rd concept: Nobody can take your assets away without first winning a lawsuit and obtaining a judgement. Just being sued does not normally expose your assets to pre-judgment attachments. Sometimes it does and you always need to check, but, normally, in the U.S. you have years to plan how to respond to an attack and the planning options you have are very, very much expanded if you put an asset protection plan in place when the financial seas are calm and before any attack comes.

4th concept: This is something I just alluded to: Asset protection strategies are best implemented when the financial seas are calm. Once attacks are mounted, it’s sometimes too late to do any serious protecting. You work hard to make your money, and I believe that you should take 10 percent of the effort you spend making your money and direct it towards protecting it. If you don’t, you’re just playing Russian Roulette with your future.

5th concept: What judgement creditors don’t know about, they can’t take. If they don’t understand or don’t know what you have, they’re simply not able to take it. Stealth works. We never rely upon stealth, we rely upon solid technology. But don’t volunteer information.

6th concept: I don’t know how to make this strong enough: Never trust anybody, especially a foreign trust company, with your hard earned money! All asset protection plans should be structured so that you are never vulnerable to any person, period! Each year, I get at least ten people calling me having been totally, completely, ruined by theft. It’s not necessary and an asset protection plan, if done correctly, never exposes you to theft.

7th concept: Divide and conquer. Never mix liability generating assets in the same entity. For example, you would never have two apartment houses owned by the same limited partnership, or you would never mix an apartment house with your securities account. Always divide and conquer.

8th concept: Finally, the U.S. is the only country in the world which permits and encourages contingency litigation. In all other countries, it is unethical for an attorney to take a case on a contingency basis. There are very few exceptions to this. In addition, most countries will force somebody attacking your money abroad to post cash with the court to handle the defendants (that’s your) fees and costs if you are successful.