Will Your Asset Protection Strategy Survive The Final Judgment? by:Jack Black
Did you know that... we live in a lawsuit-crazy society?
I'll bet you do know that. And I bet you also know that
court judgments are getting more and more outrageous all the
time. Unless you have some sort of asset protection strategy
already set up, whatever assets you have built up can be
wiped out from a lawsuit that does not go your way.
Asset protection is a means for protecting your valuables
from future lawsuits and creditor collection attempts. While
many people are looking for a solid way to do this, there
are many ways where the asset protection options that they
try are not going to work.
But, there are asset protection strategies that really do
work. What you want to do is to search out the right ones
and use them effectively. Asset protection, or more
precisely having an asset protection strategy, is something
that many more people should take advantage of. What I plan
to do in this article is to help you not take the wrong path
n your asset protection strategy.
The first thing to do is to have your asset protection
strategy in place before you get involved in a lawsuit. I
know, how do you know if and/or when you are going to be
involved in a lawsuit? You don't. But,you don't want to wait
until you are being sued.
If you are involved in a lawsuit and a judgment is placed
against you, don't try to "sell" everything to your spouse
or cousin or business partner for something like $1. If you
start to arrange your assets to avoid them being taken after
the fact of a court judgment, then that is like "closing the
barn door after the horses have escaped". It is too late.
That would be deemed illegal and is known as a "fraudulent
transfer".
The court will recognize the transfer for what it is, an
asset protection trick to try to keep your assets out of the
hands of your creditors. The "sale" would be reversed by the
court and the assets would have to be given to the creditor
anyway.
By the way, there are also other things to be wary of when
involving a spouse, another family member or relative or
even a business associate in an asset protection scheme.
If it is found that your scheme was in violation of the
Fraudulent Transfer Act then you could not only lose the
assets that you were trying to protect, but there is the
additional money the you would lose in court costs, attorney
fees and the costs involved in collecting the debt. Also,
your "accomplice" could have a judgment entered against him
or her.
Another thing to keep in mind is that if you involve another
person in your asset protection strategy by "selling" them
your assets for a few dollars, the assets would legally
belong to the other person and they would be able to do what
they want with those assets.
It has occurred only too often that the new recipient of the
assets has turned around and handled the assets in a manner
that benefits them, leaving the original owner with nothing.
Even though you trust somebody today, you never know what
will happen in the future. So, in this case we can say, "Let
the seller beware!"
One more point about "getting rid" of your assets through
sale to your spouse: In the United States, if you live in a
"community property" state then everything that is owned by
you during the time of the marriage is also owned by your
spouse and vice-versa.
So, transferring ownership to a spouse in a "community
property" state does not help your asset protection strategy
and does not protect you from creditors. The current
community property states are: Arizona, California, Idaho,
Louisiana, Nevada, New Mexico, Texas, Washington and
Wisconsin.
One asset protection strategy that does work and has been
known to work very well is offshore asset protection trust
or APT.
Here the assets are protected from lawsuits because they are
in oversea territories and therefore untouchable in most
cases. Of course, it is important to take note of applicable
fraudulent transfer rules as well. As in most asset
protection strategies, timing is very important.
Another asset protection strategy that has been shown to be
very successful is offshore incorporation and offshore bank
accounts. There are many benefits for incorporating
offshore. Legally limiting the amount of taxes you pay on
your income, and protecting your business against lawsuits
are just a few of the ways an offshore corporation or IBC
can benefit your asset protection efforts.
Forming an offshore corporation need not be any more
expensive or time consuming than forming a corporation
within your own country. Be sure to use a legitimate and
established firm when setting up your IBC. Make sure your
asset protection needs are being handled in the way you want
and that you get answers to all your questions.
Keeping with the asset protection theme of protecting your
wealth from lawsuits, the offshore bank account will also
help address this issue. Most companies that offer offshore
incorporation will also help you set up an offshore bank
account.
It would be a good idea to keep the account in non-US funds.
The accounts are usually offered with an international debit
card, so you can access your funds from an ATM wherever you
have access to one.
In conclusion... Laws are different from country to country,
and from state to state. You need to get professional advice
from a competent financial advisor as the first move.
Do not wait until you are already in financial trouble
because then it would be too late. If you transfer assets in
order to put them out of reach of your creditors at that
time, it may be seen as fraudulent and illegal. You need to
have an asset protection strategy in place before you are
sued, and before anyone tries to take your assets away.
It is never too early to get a plan in place. Just remember
the old expression, "If you fail to plan, you plan to fail."
Do it NOW!
About the author
Jack Black, a non-lawyer, can point you to the
right places to take care of your asset protection needs.
For more details visit this site now:
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