The rapid increase in the Asset Protection planning field is primarily a result of the large number of people who have finally realized that their wealth is more finite and fragile than they ever imagined. This has become more evident as the boom in litigation has continued unheeded for over 20 years. Unfortunately, this new found interest in Asset Protection has created a large number of people seeking to profit from it leading to a more puzzling and fraud-ridden landscape for legal services for consumers than ever before.
The last 10 years of my national legal practice have been devoted exclusively to Asset Protection law. In that capacity I have been fortunate to help protect a client base of thousands of clients representing billions of dollars in safely protected assets. This very concentrated practice has also provided a good understanding of the plans and planners at work in this specialized field and I have seen the very best and very worst of the plans being sold across the country. Quality asset protection planning includes tools and strategies that if not implemented correctly, can have far reaching and potentially devastating effects. You owe it to yourself to conduct due diligence before hiring an attorney.
Due Diligence Questions to Ask An “Asset Protection” Lawyer
#1: Are you a lawyer or part of a law firm that will keep our discussion privileged?
Remember that dealing with “promoters” or LLC Mills does not provide the skill set and training required. More importantly, if you are not dealing with a law firm that allows all your communications to be attorney privileged everything you do is discoverable with a simple subpoena, including all emails and other communications.
#2: How many clients have you done this specific type of planning for?
Quite often asset protection websites will claim to serve thousands of clients and be a top asset protection law firm. Closer examination of the sites frequently reveals that they have a dozen plus distinct practice areas and are simply representing that client base as if all of it is with Asset Protection clients.
#3: What’s the average net worth of your clients?
It’s important to deal with a lawyer and firm that has a depth of experience with businesses, assets and families like yours. Knowing what your liquidity needs are and not using outdated estate planning tools that are not income, business and age appropriate are common amateur mistakes we see other lawyers make. Also, be aware that a number of different specialties which now classify themselves as “Asset Protection” planners. The field now includes elder care lawyers, annuity and insurance salesman and variety of other folks that may have good products and services, but are probably not what you are looking for.
#4: Where do you work?
Having a law firm that works nationally is a good hedge. It’s important that they understand the protection available by statue in your locality and give you a plan that will stand up to attacks in any jurisdiction. It’s also important that it is portable so it can travel with you if you move and flexible enough to allow you to do business and own assets in more than one jurisdiction, i.e. something as simple as a vacation home in another state or a life insurance policy with a high cash value that could be lost in a lawsuit.
#5: How many types of law do you practice and how long has Asset Protection been part of your practice?
Make sure you are comfortable with their experience level. Lawyers are increasingly specialized and while many of have a good general knowledge of a variety of concepts and issues we tend, like all professionals, to be good at only one or two specialties.
#6 Can you provide any professional recommendations?
This can be tricky for lawyers, especially those who practice in sensitive fields where people value their privacy like Asset Protection as opposed to say, a real estate lawyer. Nevertheless, they should be able to provide at least a couple of professional references that speak specifically to their experience in this field or from related professionals outside their own firm that refer clients to them for this specific service.
#7: Have you written anything on this topic that outlines your tools and strategies?
If your attorney is even marginally qualified to work in this area with you they should have extensive educational materials that describe the tools they use and what each tool does. If they can’t educate you about the tools they will likely do more harm than good, as part of our job in this area is to educate our clients on what works best, why and how to use it going forward.
#8: Can you provide a specific written plan that outlines costs, results and requirements?
Every firm prices its services differently, and that’s OK, but they should be able to show you in writing what result they are going to attempt to achieve and at what cost.
#9: What kind of on-going support and education do you provide to your clients and at what cost?
Hiring an Asset Protection lawyer is one step in a multi-step process with many pieces, not a one-shot magic bullet. If you pay someone in my business to build you a “Legal Vault” that is capable of containing your life’s work, they better be there to help you put the assets in it, use it the right way, teach you to lock the door and show you how to open it when you need your assets or use of them. Merely getting a box of legal papers on its own is not going to serve you and your family well. Be wary of the fees involved to use the plan, in addition to what it costs to set up. Ask specific questions about accounting, compliance and tax status and reporting burdens, many of the best Asset Protection tools and plans are explicitly tax neutral. Finally, be clear about how accessible your attorney is going to be going forward and at what cost. Many hide huge fees on the back end to lure you in up front.
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