Customizing Asset Protection Plans

Clearly high-risk, high net worth individuals are obvious candidates for some form of deterrence against the abuse of law that dominates the U.S. tort system. In practice, however, just about anyone with assets can benefit from asset protection planning. This is particularly true of middle-class Americans who find that even a modest lawsuit can wipe out the savings of a lifetime. Which is why Lodmell & Lodmell customizes asset protection plans to reflect an individual’s financial circumstances and desired level of asset protection.

Before discussing the benefits of legitimate asset protection, it is important to understand that the fundamental purpose of the legal tools employed in asset protection planning is neither to hide personal or business assets nor to deprive the U.S. Government of taxes derived from the income earned on those assets. Rather it is to shield your assets from unforeseen attacks by dubious creditors or plaintiffs so that you and other beneficiaries of your estate can ultimately enjoy the legacy you have worked to earn.

How is this protection of vulnerable assets accomplished? Lodmell & Lodmell use an Asset Management Limited Partnership ™ (AMLP) together with a carefully crafted Bridge Trust^® to help build a sort of legal fortress around your vulnerable assets, keeping them safe and out of the grasp of predatory creditors. We do this by legally separating you from your assets by means of the AMLP and by “internationalizing” those assets in the Bridge Trust^® if and when you are threatened by an unanticipated lawsuit or other legal action.

Benefits of Asset Protection Planning

What, then, are the primary benefits of asset protection planning?

• Makes it difficult or nearly impossible for would-be creditors to collect judgments against your personal wealth, as long as those assets remain in the Trust in a carefully selected Trust-friendly offshore jurisdiction.
• Eliminates the incentive to sue by legally separating you from the title to your assets what lawyers call “removing the legal remedy”, which we do without denying you the beneficial ownership of, or distributive rights to, those assets.
• Puts your assets safely out of reach of the U.S. court system, which substantially enhances your negotiating strength when attempting to settle legitimate disputes.
• Even if your assets are “internationalized,” you still retain the ultimate benefit of those Trust assets, based on previously established and carefully crafted directives.
• Previously-established directives also permit distributions of Trust resources for your support and welfare of any and all beneficiaries, primarily you as the Grantor.
• Once the triggering event that “internationalized” your assets disappears, you can return those assets to the U.S. or retain them in the security afforded abroad, as you wish.

Typically, however, the mere threat of triggering an International Asset Protection Trust is sufficient to ward off most predator attorneys and encourage legitimate creditors to settle the matter on more attractive terms than might otherwise be the case.

Critical Considerations

Regardless of the net worth, there are several critical points asset protection candidates and their attorneys must consider.

• Funding: The most critical point is that funding may occur only when there are no creditor claims pending, threatened or expected. Otherwise you invite a charge of “fraudulent conveyance,” which could unravel the plan and lead to possible prosecution.
• Solvency: You must remain solvent after funding the plan, with the ability to pay all reasonably anticipated debt from resources inside and outside the Trust.
• Advisor: Careful selection of an experienced asset protection advisor is imperative. Since asset protection planning often is linked closely with traditional retirement tools, considerable knowledge of recent asset protection law and estate planning expertise is most desirable. This is particularly important now when there is so much misunderstanding by unknowledgeable lawyers and financial advisors about what asset protection can and can’t do. Additionally, there are a great many Tax-Schemes that purport to be asset protection, which should be avoided at all costs. Asset protection and tax savings should never be put together.

The best way to determine if your assets are at risk and the legal options available to protect them, is to schedule an Asset Protection Analysis. We will provide a confidential review of your financial resources, including your risk level, asset classifications and personal objectives.

Taking control of your own financial, estate and asset protection planning is critical to your peace of mind. Let us help you gain that peace of mind. Please call 800.231.7112 to schedule your analysis.