Email Article Print Article

Asset Protection Specialist

By John Dietz - Email Editor

Date: 20-Sep-2005

This week we are back to the business of Asset Protection planning. Recently, I have seen people spend thousands of dollars for Trust documents that would not hold up in court when the client was under attack. The problems lie in the structure of the plans. In all of the cases, the plan was put together by a general practitioner, something akin to the family doctor.

A great example of this point is the old axiom “a jack of all trades, but a master of none.” If you’ve ever tried to get your computer fixed, you realize there are people that know the operating system, and then there are different people that know the hardware. It’s a rare find when they can do it all. This information separation has always been, and I suppose, will always be. When something is wrong, you must identify the problem. That may start out with finding a generalist, but once the problem has been identified, you need a specialist. The true answer is that you need both and more. There is a big difference between a cocktail chat and real live life answers.

So let’s look at the people involved in your planning. This Asset Protecting planning process is simple if in the hands of the right provider. If it’s something specialists do everyday, for them it becomes second nature. The reason I mention this is because there are a host of players involved, and it can get confusing. Similar in medicine, you have a general practitioner, a specialist, a surgeon, an anesthesiologist, a billing department and so on. There are so many people performing separate functions that it can make your head spin.

Who are the people involved in a living, breathing, life-long Asset Protection Plan? The first person is you, your significant other (if applicable) and your direct family members. Next are people that you need to involve to create it. First, it may be your local attorney. While some general practitioners don’t know that much about Asset Protection, they may know a lot about you. This may be equivalent to the family doctor. Your tax preparer would be your next person. I will beat the drum again and say that Asset Protection planning done properly will almost never save you taxes. It is considered tax neutral with no gain and no loss.

You may want to review your insurances with you local insurance agent also. This is one person that people tend to miss. Spending time knowing exactly what coverage you have and don’t have is extremely important. You would be amazed if you just ask some very direct questions about your insurance. You may find you’re not covered for what you think you are.

Now is the time to bring in the specialist. This is a planner who specifically deals with onshore and offshore assets. It’s the same as if you needed heart surgery: You would need and want a specialist that only does heart surgery.

There is no sense in putting a plan together if you don’t use a specialist because if it’s not done right, the plan could be unraveled by any judge in the land. So this raises the question: “What could happen if your plan unravels?”

The primary situation where your plan could be foiled would be if you could be charged with contempt of court. This normally happens when a judge determines that you have the power to deliver the protected assets, but are refusing to comply with his or her order. If this is the case, the judge can throw you in jail for "civil contempt" for failing to comply with a reasonable order, which you have the power to obey. If you don't have the power to obey the order and are still thrown in jail for contempt, this type of order will normally be undone because it is punishing you for not obeying an order that you do not have the power to obey. This second type of contempt is called "criminal contempt," and is unconstitutional. In the famous Lawrence and Anderson case the judge found that the defendants had retained the power to obey his order. That is why they went to jail. More on this in Thursday's newsletter dealing with the new Pukke case, the facts of which are so bad they make me want to puke!

Sound Asset Protection prevents your assets from ever being exposed. You and your attorney can use what is called “paper poverty” as the most convincing argument possible for the creditor to either drop the claim or settle cheap because producing proof of your poverty makes you a rock…and as I’ve stated before, "you can’t get blood from a rock."

RELATED ARTICLES:

• Protect the equity in your home
• Asset Protection Plans
• C.A.L.M. Introduction
• Get educated on Asset Protection