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Some More VERY BASIC Asset Protection Rules.

By Rob Lambert - Email Editor

Date : 26-April-2007

Dear Subscriber:

From the comments I am getting, it appears that even the fancy lawyers are finding a simplified re-cap of my basic rules of Asset Protection valuable. So, I am going to keep at it for a while longer.

Remember, Asset Protection should be part of your daily life. Every business and personal decision you make involves choices which expose you to less or more risk. If you know enough and have the correct tools in place, you can normally throttle your risk down to an acceptable level. If you don’t know the basics, you are flying blind …. never a good thing.

A good place to start is to realize that almost all Asset Protection Planning breaks into statutory and non-statutory planning.

STATUTORY PLANNING
Some Asset Protection Planning revolves around specific statutes designed to grant protection to certain types of investments. Normally, these types of statutory Asset Protection arise when the State or Federal lawmakers decide that a certain type of investment deserves protection (and who said that Asset Protection in and of itself isn’t a valid business purpose)? Examples of this type of protection would be things like ERISA, homestead exemptions, the corporate shield, charging order protection, spendthrift clause protection, bankruptcy exemptions and the special protection sometimes afforded life insurance proceeds by statute. Don’t forget these statutory type exceptions. You don’t have to be a genius to figure them out, and they are available at a low cost to anybody and everybody who is informed enough to utilize them.

NON-STATUTORY PROTECTION
Non-statutory Asset Protection keeps guys like me busy. This stuff is usually more complicated and expensive. Remember, there is no one sized Plan which fits everybody; and any Plan is only as good as the training you receive. Paying some guy like me to build you a fancy Plan is like going out and purchasing an 800 horsepower Ferrari. If you don’t get the training on how to drive it, you are just going to kill yourself the first time you take it out. Always remember this: Plans aren’t worth the paper they are written on unless you have the knowledge to “drive” them.

With that said, most non-statutory protection depends on a simple key rule: What you don’t own can’t be taken from you. Think about this simple rule. It is fundamental and obvious. So obvious, most people miss it.

If you give something away, it is no longer yours. It belongs to some other person. If the act of giving the asset away was not a fraudulent conveyance, the gift will be valid. So, this new guy (who can be a person or an entity you form) who got this gift will normally not be responsible for your obligations. Simply stated, if you give your kid $30,000 to go to college, and then get into trouble, your creditors will normally not be able to get to this gift to satisfy your obligations.

Of course, nothing is ever this simple, and there are always exceptions, and then exceptions to the exceptions; however, this rule is generally true.

Now, a bit more on Asset Protection Group. It seems like Bill Reed and his gang of flim flam men just won’t give up. They have just been hit with another contempt order. I can hardly wait till somebody with a judgment against him hires me to break his bullet proof Asset Protection!!!! It will be a pleasure. Here is a link the the USA Today article.

It is my hope that these simple rules are helping you. More next week.

Have a healthy and protected week.

Rob Lambert

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