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Tailoring asset protection plans to individual needs is a job that only a skilled and experienced asset protection attorney should attempt, if for no other reason than that the benefits of the strategies employed may be lost if they fail to comply with all applicable state, federal and international laws, as well as any precedents that may have been set by previous court actions.

While high-risk high-net worth individuals are obvious candidates for for asset protection planning, in practice just about anyone with assets to lose can benefit from the lawsuit-deterrent effect of asset protection planning. This is particularly true of middle-class Americans, who are finding that even a modest lawsuit has the potential to wipe out a lifetime of accumulated wealth.

Regardless of the net-worth involved, there are a number of critical considerations of which both the asset protection attorney and client should be cognizant. Most critically important is the timing of funding the legal tools with assets. The law is very strict on this point.

Funding may occur only when there are no creditor claims pending, threatened or expected. To do otherwise may invite a charge of “fraudulent conveyance,” which would result in transactions being overturned—and even more dire consequences, such as prosecution.

Also critically important is that the Settlor of an Asset Protection Trust (APT)  remain solvent after funding, with the resources to pay all reasonably anticipated debt from resources outside the Trust. The courts may not look favorably on those partnerships and trusts that are established otherwise.

Considerable estate planning expertise may also be required in the preparation of asset protection plans, since there typically is much linkage with traditional estate planning and retirement tools, such as irrevocable trusts, pensions, life insurance programs, annuities, wills or revocable living trusts.

So there is no misunderstanding, what asset protection planning doesn’t do—and shouldn’t do—is conceal assets from legitimate creditors or hide income from the Internal Revenue Service. Unfortunately, some legal beagles and their clients may attempt to do just that. The government has a word for that type of planning, and it’s not asset protection. It’s fraud.

Unlike schemes that promise huge tax benefits, legitimate asset protection plans are always income tax neutral. Their sole objective is to protect assets from abusive litigation—not cheat the government by evading income taxes.

The best advice that can be offered to someone being pitched on the tax-saving benefits of asset protection is to hold on to your wallet and head for the door as fast as you can. Any so-called asset protection plan that purports to save on income taxes is most certainly questionable if not illegal.

As might be expected, some jurists take a dim view off asset protection—not because it’s unethical, because it’s not; and not because it’s illegal, because it’s not. Most of whatever criticism there is comes from those who know little or nothing about this relatively new field of law, and much of what is said to be criticism emanates mostly from trial lawyers whose ox may be gored by legitimate asset protection planning.

A typical argument by trial attorneys with vested interests in the financial outcome, is that asset protection is a wily way of circumventing the law to avoid claims of future creditors. If by circumventing the law they mean crafting existing law in ways that create a level playing field where plaintiffs and their predator attorneys no longer have a decidedly  unfair advantage, then asset protection protection attorneys doubtlessly would plead “guilty, as charged.”

The fact is that many of the victims in today’s civil justice system are the defendants who need protecting and not the plaintiffs who claim to be victims, without responsibility for their own choice and often irresponsible acts.

 

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Pashmina Lalchandani

CEO & Co-Founder, Bar & Cocoa / Owner, Flow Simple
December 9, 2010, Douglass was a client of Pashmina’s

I’ve known Doug in many contexts, as a friend, as a client and as a business partner and he impresses me on all levels. He’s dependable, smart, generous and I wouldn’t hesitate recommending him and his law firm to anyone.
He’s the best and most ethical lawyers providing asset protection with rock solid strategies to give you peace of mind about your wealth. Straight forward, and straight talk. Doug is exactly the lawyer I want on my side. If I send someone to Doug, I know they’ll thank me for it!

Social & Solar Entrepreneur, Pan Afrikan Theorist, Translator/Interpreter,
Founder & Visionary Leader @ Afrikanpride.
March 12, 2011, Marlon E. D. J. worked with Douglass but at different companies

Doug is one of the most powerful thinker i have came across. During the short time that i have known Doug he has been a great source of inspiration. He has a simplistic yet effective and accurate way to analyze anything you bring to his attention, and then by asking you key questions he gets you to see the light at the end of the tunnel. Besides being extremely bright, he is a genuine and caring individual which is why I feel fortunate to know him. I can say without a doubt that he his the person you would want to talk to if you were in need of a person with his expertise.
Most of the lawyers out there will probably meet your needs, but if you are looking for someone to exceed your expectations and give you that wow factor, look no more he is the person for the job.

Patricia Salter

Associate Dentist at Smileology
December 1, 2010, Patricia was a client of Douglass’

I have been a client of Douglas Lodmell’s since 2001. My main concern was asset protection in this litigious society. I can sleep alot better at night knowing I have the instruments in place to protect the fruits of my labor, and that they will not end up in the hands of a slick trial attorney.

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