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A Planner's Quiver

By Rob Lambert - Email Editor

Date: June 13, 2006

Watch out for single-minded purveyors of rock solid Asset Protection Plans.

We are besieged by good salesmen touting Asset Protection products. Some of these products work and many do not. There is one certainty: The expert who approaches you with his specialized plan will make his product sound like it is the only effective approach.

Watch out for myopic hawkers of products. They belittle everything which doesn’t fit into their box. It is always easy to find fault with other approaches.

The reality is that any comprehensive plan involves many disciplines. An approach which is right for one person is most likely not right for the next. There is no one-size-fits-all solution. In fact, there is no ONE solution.

The art of the planner is choosing the right parts for the individual in need of protection. The correct parts will depend on the nature of the person needing protection. For example, a soon-to-be rich heiress needs different planning from a self-made millionaire in a difficult marriage. To formulate and implement a comprehensive plan, any good planner must have many Asset Protection arrows in his quiver. I am certain that he won’t be able to fire all of the arrows himself; however, he needs to know enough to help the client pick the right arrows and find the right people to fire them.

There are many simple and relatively effective arrows in any decent planner's quiver. These Asset Protection arrows (typically domestic) include:
1. Homestead Rules
2. Pension Planning (ERISA and IRA type plans)
3. Equity Stripping
4. Insurance
5. A rainy day savings reserve
6. Intelligent estate planning
7. Eldercare health care issues
8. Dividing and conquering (separate entities for different assets)
9. Preventive health care
10. Choosing good and like-minded financial advisors
11. Spending some time with your family

The list goes on and on.

These relatively simple Asset Protection arrows can be supplemented with a host of more complex and often more effective Asset Protection arrows. These often have an offshore aspect and include:
1. Asset Protection Trusts
2. Private insurance companies
3. Insurance products including private annuities
4. Protected bank accounts

The point of this newsletter is to watch out for the single-minded purveyor of one or two Asset Protection products. There truly is something for everybody. For example, anybody reading this with an unincorporated business should consider dividing and conquering by putting the business into an entity separate from his personal savings. In the same way, anybody with a home should consider homesteading it. Certainly anybody with a spouse or children should have a solid estate plan.

In short, don’t buy from anybody unless they see the big picture, or you are working with an advisor who sees the big picture and retains specialists for you. In the same way, don’t be put off by what seems like a complex web of Asset Protection myths and truths. The truth is that there are simple steps almost every person should take early on in their adult life. A comprehensive plan is nothing but an assemblage of simple techniques (each a baby step) into something that protects your assets from the host of people who live to part you from your hard earned wealth.

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