In the olden days before asset protection advisers came along, the most convenient way a person had to preserve his wealth was to simply transfer assets to the names of family members, spouses, and friends. That kind of simplistic approach may have worked decades ago, but in the kind of litigious climate that exists today, it would be nearly impossible for you to consider protecting your assets simply by transferring them into another person’s name.
Imagine for instance, that you’re a doctor being sued by a patient for medical malpractice. It wouldn’t take his or her attorney more than a couple of hours to find out the minutest detail about every piece of property or any other asset that you own. A little more groundwork and some investigation, and the attorney will also be able to find out how many assets you have transferred into the names of your personal friends, family members or relatives. Don’t be complacent if you manage to transfer assets into a distant relative’s name. A crafty investigator and a persistent medical malpractice attorney will dig as deep as it takes to track your assets right back to you.
In other words, simply transferring assets into the names of your spouses, family members or friends, does not work as asset protection anymore. In fact, something like this may likely be used against you if the lawsuit goes to trial. It can come out before a jury or judge, that you transferred assets into other people’s names, purely to avoid creditors or plaintiffs from getting to them. Suffice to say, that doesn’t make a great impression on a jury. It will be hard to convince any judge or jury that your intention in transferring the assets was simply to protect them, and not to conceal them from creditors.
The bottom line is that transferring assets to the names of family members and friends offers no asset protection benefits at all. You will need a more structured system to preserve your wealth.
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