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Our newsletter today covers two topics. The first is what to look for - or what to avoid - in the best and worst from asset protection providers. The second topic that wraps up our newsletter is briefly about an important movement afoot, and reflects upon what may be a pivotal point in history. I'm sure you'll get the point.
Now, on with the first part of your newsletter.
Asset protection at one time was performed by a relatively small number of international lawyers with proper experience, training, and background. Today, there are many well-intentioned practitioners putting together asset protection plans - and some with questionable intentions - who don't have a clue how planning for their clients will stand up during litigation, or how to actually protect client's assets from lawsuits. Unfortunately, for the clients who fall into the hands of these well-intentioned - or worse - their plans often fall apart at the first threat of litigation.
The real test of successful asset protection planning stands or fails in the courtroom. Read the last sentence again. Remember these words. Quality asset protection planning is all about achieving the desired results you seek in the first place. Top results can only be best achieved from planners with many years - or better yet, decades - of experience, training and expertise in the field of asset protection.
What to Look For and Avoid in a Plannner When Considering Asset Protection
First, the worst offenders are the non-attorney scam artists who put together worthless asset protection 'packages' from certain offshore havens. These kits rarely provide any asset protection. Not only are the standard packages often useless, but they are rarely properly funded with the assets in the first place that are supposed to be protected.
The next set of offenders are the asset protection providers churning out trusts at discount prices. After attending a seminar or obtaining a form trust document from others, they becoming self-proclaimed experts. Generally, secretaries and paralegals cranking out documents from their word processors are behind these so-called experts. There's little - if any - customized planning, and worse yet, these gurus don't fully understand how asset protections laws operate.
What's more, there are the domestic lawyers who claim that their trusts, companies, or bank accounts are all but guaranteed not to fail. These guarantees are often misleading and usually false. Unfortunately, these marketing gimmicks create a negative image for the long-time quality planners, paint the wrong picture in the courtroom where they are ultimately challenged, and create unreasonable expectations by individuals desiring legitimate integrated asset protection and estate planning.
Finally, watch out for claims of using multiple layers of entities to hide or conceal assets and obtain maximum privacy. These plans are generally a waste of your time and money. The hallmark of a successful asset protection plan is not in hiding or secreting assets.
So then, how do you achieve quality asset protection planning in a world increasingly filled with inexperienced planners, or peddlers of questionable asset protection planning?
Picking the Right Planner with the Right Tools
Asset protection, properly implemented, is a legal strategy of segregating assets into various entities for safety, retirement, or subsequent generations. It also means properly managing risks associated with the different types and values of assets, and then segregating them from other less-risky assets or activities.
And asset protection is a system, or methodology, that ultimately should allow you to create a significantly stronger line of defense to resolve a dispute with superior results than if you did not have proper planning in place.
Asset protection planning is, and should be, your final line of defense. And you are foolhardy and simply rolling the dice if you haven't created a successful asset protection plan in advance of a threat or challenge to your assets. This means before a threat materializes.
Importantly, asset protection means the integration of multi-disciplinary fields of international law and business planning. Solid asset protection planning utilizes the experience of qualified and seasoned multi-disciplined individuals, and should reflect a high order of ethics and competence by planners with the right background.
Regrettably, even many well-intended asset protection planners have the skills in the wrong order. This means that they have the least experience in a field where it is needed most. They are frequently most experienced in the fields which are of secondary, or lesser, importance, such as estate planning and taxes. While these skills are of critical importance in integrating and achieving a successful asset protection plan, these planners too often are lacking in any meaningful trial and litigation skills that are needed most to actually protect assets against lawsuits.
Specific Knowledge & Skills Your Planner Should Have
As stated above, the true test of whether asset protection planning fails or succeeds is in the courtroom. This is a basic premise you must remember when looking to achieve quality asset protection planning. Therefore, first and foremost, significant trial and litigation experience is essential to quality asset protection planning.
Being a seasoned and experienced trial litigator means being able to predict what judges and juries will do when faced with your particular set of circumstances. You simply can't make reasonable trial predictions unless you have been in a number of civil trials over many years. Attempting to predict what judges will do without understanding the courtroom and litigation atmosphere or tactics is akin to a hope and a prayer. It is unfortunate how many so-called asset protection planning experts have little or no experience in this single most important arena where your asset protection planning could ultimately be tested.
Secondly, it is essential that a planner have knowledge of the Uniform Voidable Transaction Act (UVTA), once known as the Uniform Fraudulent Transfers Act (UFTA), and how your planning could be wiped out by failing to comply with statutory laws. Good asset protection plans start with a veil of protection created through the use of corporations, LLCs, trusts, and other like entities. Assets must then be properly transferred into these entities. The planner must be well versed with the laws regarding the formation, operation, and defense of these structures. And too, a good asset protection planner should be knowledgeable about bankruptcy laws since these legal tools may also be needed in a time of crisis.
Thirdly, it is important that planners be well-versed in the laws of the main offshore jurisdictions they operate in, as well as with international banking and how monies are properly and legally transferred overseas. And importantly, your planner must understand how laws and customs function from jurisdiction to jurisdiction.
Fourthly, quality asset protection plans are created in coordination with competent tax professionals. It is important that no negative tax consequences be created. In the first instance, asset protection plans should be designed 'tax neutral', meaning there are neither positive nor negative tax consequences. At the same time, if opportunities for legal tax mitigation planning exist, this should be incorporated into the planning structure by qualified tax professionals.
Finally, asset protection plans should be integrated with a client's overall retirement and estate planning objectives. Integrating asset protection planning with these objectives is highly desirable for a variety of reasons, and allows you to achieve quality results.
Seek Competent, Experienced, and Seasoned Planners
Asset protection is unlike any other form of legal planning. Always hire the best attorneys who have the experience and training in the areas most important to make the plan work. Question these attorneys on what they do and how. Ask how many civil cases and courtroom trials they have successfully completed. Then, rely on their legal expertise and judgment, but always use your common sense.
For asset protection planning to work, ask yourself if you will be able to look a judge or jury in the eye and say that you are confident in what your asset protection planner has created for you. Will you be able to state that the steps you took were legal, ethical, and avoid even the appearance of impropriety?
One of the most important keys to achieving solid asset protection planning is to take steps now, well in advance of problems presenting themselves. If you wait until it is too late, then there is not much that you can do other than damage control. Take action today, while the seas are calm and before the storm sets in. I know I'm a bit biased, but look here to compare nearly four decades of necessary asset protection experience.
To learn more about the legal tools (both stateside and offshore) to help protect your assets see How to Legally Protect Your Assets, 2nd edition. And to learn more read Offshore Living & Investing, 2nd edition These two great books are found at this link.
And if you’d like to conduct a confidential review of your personal situation and see for yourself how international planning can fit into your future, contact me here.
And the second, pivotal turning point is about Greta and Addy before wrapping up.
If you haven't followed the international movement behind Greta Thunberg, you may be missing an important turning point in history. Ms. Thunberg has been featured on the cover of Time Magazine, testified before the US Congress, addressed the United Nations, is nominated for a Nobel Peace Prize, and much more. She made a global impact with her blunt, matter of fact speaking-manner, supported by science and facts. In one year she rose from a young, unknown school girl with a cause to a well recognized global leader with an international following.
Greta is 16 years old. She has accomplished more in the past year than most people in a lifetime. Her mission is addressing an urgent need for immediate climate change. Take a moment to listen to her moving message before the United Nations found here.
But it's not Ms. Thunberg's commanding message for climate change that's the point to recognize. And it's not whether she's right or wrong. What can't be overlooked is that she has created a huge voice for the next generation of young voters, workers, and business entrepeneurs. Whether you agree or disagree with her climate change message - or the science - there is an unstoppable movement reflected by the next generation knocking on the door. This can't be ignored.
And Addy? She's my grandaughter that recently turned one year old. I hope all the science - and Greta Thunberg - are crazy, damn wrong. But I won't risk her future that the science - and Greta - are right.
The way I see it, embracing renewable energy technology, and avoiding fossil fuels and waste, not only creates a healthier enviroment, but also helps create new opportunities, new jobs, new investments, new wealth, and a higher quality of living. But only if each one of us are willing to do our part to embrace a better future. Even if the science - and Greta - are only half right and we delay, then there's not a future for Addy as you and I know the past.
How about you, your children, or your grandren? Is it worth taking the risk that science and Greta are wrong? If not, then big changes are urgently needed today.
Until next time…..
David
David A Tanzer, Esq.
JD, BSc, Ph.D (Hon)
Vail, CO USA:
Tel. (970) 476-6100
Fax (720) 293-2272
Auckland, New Zealand:
Tel. (64) 9 353-1328
Fax (64) 9 353-1328
Brisbane, Australia:
Tel. (61) 7 3319 6999
Fax (61) 7 3319 6999
(Licensed to Practice Law in U.S. States & Federal Courts; Assoc. Member Auckland, N.Z. District Law Society - Foreign Lawyer; & Assoc. Member Queensland Law Society, AU - Foreign Lawyer)
The comments herein are not intended to constitute a legal or tax opinion regarding any specific legal or tax issue as additional issues may exist; does not reach a conclusion with respect to any specific legal or tax issue addressed herein or any additional issues not included; and cannot be used for the purpose of avoiding legal or tax obligations or penalties with respect to issues in or outside the scope of matters discussed herein.
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