The Sale of Asset Protection Services
Many companies and individuals offering asset protection services proffer advice that is misleading at best. Unscrupulous promoters and marketers will often tout the universal benefits of foreign asset protection trusts (“offshore trusts”), Nevada corporations, land trusts, complex corporate structures, and mechanisms that allegedly make assets disappear or at least very difficult to find. The truth is that each individual client in need of asset protection services is just that: An individual. As a result, good asset protection attorneys tailor their services to the needs of the client. There is no universally “right” answer or plan. It is simply unethical and wrong to represent that any asset protection “package” meets the needs of every potential client. If you are considering a prepackaged asset protection plan sold through a seminar or website, then we strongly encourage you to at least obtain a second opinion on the appropriateness of such plan from a reputable practitioner of asset protection law.
Ethical Considerations From the Client Perspective
Aside from ethical issues concerning the marketing and promotion of asset protection services, there is one prevalent question that you must answer for yourself before engaging an asset protection attorney: “Is asset protection right for me from an ethical standpoint?” At Lodmell & Lodmell, we hold ourselves to an extremely high ethical standard. Here are a few of the ethical premises under which we operate:
- Asset Protection is separate and apart from tax planning. In order for an asset protection plan to actually work–for it to protect your assets–it cannot be used a mechanism to avoid taxes.
- Asset protection is not about hiding assets. Under no circumstances should an asset protection plan require any of our clients to lie, whether under oath or simply filling out a loan application.
- Asset protection is not a license to act recklessly or illegally. We require our clients to maintain a high standard of responsible business practices. We always recommend that professionals carry liability insurance sufficient to cover accidents that may occur, when such policies are reasonably available. Good asset protection planning is never an excuse to disregard the welfare of other people or their property.
- Asset protection is about carefully following the rules of the game and staying within the strictures of the legal system. Predator plaintiff’s attorneys will take full advantage of each and every opportunity to deprive wealthy individuals of their assets, but in order to be successful, they must operate within the confines of the law. Asset protection is the other side of the coin. It’s your opportunity to take full advantage of the legal system before trouble is spotted on the horizon (protecting assets once you are on notice of a potential claim or suit is a whole different ballgame and, while possible in certain circumstances, is usually less effective than planning done well in advance of a claim).
In short, asset protection services should strive to allow clients to determine the extent of their exposure to losses. From a business perspective, full disclosure of the existence of corporate entities and trusts is highly recommended. Once disclosure is made, it’s up to the other party to conduct their diligence and determine if they want to transact business. Nothing is hidden from sight. In terms of professional liability, again we stress the importance of insurance policies intended to compensate injured parties for actual damages, but in all circumstances we strive to limit and predefine the limit of such liability in order to deter plaintiff’s attorneys from seeking windfall judgments. By adhering to high personal standards and acting responsibly, it should be clear that you can ethically take full advantage of asset protection services.
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