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The Morality, Credibility And Ethics That Lay Deep At The Heart Of Asset Protection

By John Dietz - Email Editor

Date : 28-July-2007

There should not be a question of whether or not you need to protect your assets. It is a simple notion to understand that if something is worth working for, it is certainly worth protecting. There are those who claim that only dishonest people protect their assets, and that a person who has a reason to protect their assets is less than credible.

An ethical, moral person thrives on an integrity that balances the “wants” of life. When a person “wants” more than is feasible or reasonable, they often face a credibility issue from the judgment of others. However, the desire to protect one's earnings and assets does not in any way cause credibility issues or make a person immoral. Unethical behavior, which creates credibility problems, comes from deep within our core beliefs.

How should someone deal with a society that may think that they are corrupt because they have protected their assets or used a trust to guard their wealth? This is the “hush-hush” question that many fear to address, but when the question surfaces, it is time to dig deeper into the heart and character of Asset Protection philosophy.

Our legal system is set up so that the courts can enforce the very decisions that judges have ruled on. If you were a creditor, this would certainly make sense to you. If you were the debtor, there is a good chance this system may seem unfair or even corrupt.

The Dilemma
Let’s start with the premises that you borrowed money from a friend. Would you pay your friend back in a timely fashion? Take the reverse; what if a trusted friend borrowed one of your power tools, and the tool ended up broken when you got it back. Would you expect your friend to pay you for the cost of fixing it? The question cuts both ways. Would you knowingly defraud your friend out of the money you borrowed? Would you want your friend to pay you for your broken power tool? Does character play a role in a good Asset Protection Plan? From an advisor's standpoint: absolutely.

Take the latest Hollywood hiccup; Lindsay Lohan was arrested for drunk driving and cocaine possession just 11 days after her stint in rehab. How would a judge look at Lindsey’s Asset Protection Plan? If public opinion were any indication, I would say there is a likelihood that the judge may look at our very cute, 21-year-old actress as a tad bit insincere.

Another noteworthy headliner, which is difficult to get your arms around is the recent indictment of Atlanta Falcon's $130 million dollar football star Michael Vick. He is charged with involvement in illegal sport dog fighting, and more specifically, of allegedly disposing of the loser dogs by torturous means. Prosecutors charge that dogs sometimes fought to the death on Vick's property, and that some losing dogs had been shot dead, drowned, hung, or electrocuted. Consider how a pet-loving judge may view Mr. Vick's Asset Protection Plan.

The catch-22 is that Asset Protection can be perceived as counter intuitive. The Uniform Fraudulent Transfer Act attempts to quantify the transfer of assets when there is a “known creditor.” In essence, not abiding by the laws that governs the act gives a judge a healthy swath and an almost certain repatriation order of transferred assets after a known creditor attack. However, as in many areas of the law, the lines are not completely clear, and each state and circuit maintain a different view resulting in court decisions that vary.

This catch-22 is only when a person faces a situation that they have themselves caused through unethical behavior and a lack of morality; not because a deal went bad or an accident happened, but because someone is pushing their “wants” over the edge, violating someone's rights as a citizen, the law, or both.

There seems to be one constant in all the cases where the outcome was, shall we say, less than debtor friendly. In most instances, the debtor’s credibility was in question. Well, let me re-phrase that, the debtor’s credibility was non-existent.

So what are we to glean from this? Should you implement an Asset Protection Plan? Yes, it makes total sense. With that concluded, Asset Protection is a life-long commitment to protecting what matters to you. This includes you and your family's health and wealth. Living the good life while taking the high road will almost certainly go a long way if you ever end up in front of the guy in the black robe.

For those that would like a good, solid understanding of Asset Protection in an easy to learn fashion, Rob has just released his new 10-session Asset Protection course.

Until next time,

John

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ABOUT THIS EDITOR:

John Dietz is a strategic advisor at Trustmakers.com with a passion for client solutions that can encompass your business, your real estate, and your personal assets. Mr. Dietz serves to educate you on the latest in asset protection planning.

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