Frequently Asked Questions (FAQ)

GENERALLY

What is asset protection?

Asset protection is planning that is intended to lessen the rights of creditors and potential creditors.

Is asset protection illegal?

Asset protection is not inherently illegal.

There are some types of asset protection that are perfectly legal, such as paying down your house in a state that exempts a homestead from foreclosure and sale.

Asset protection can be illegal, however. A transfer to defeat the rights of existing of anticipated creditors that violates the fraudulent transfer laws is illegal. Hiding money in an offshore account and not disclosing the account on a bankruptcy schedule is illegal. Defeating the collection rights of the IRS is illegal. These are just a few examples.

Techniques for protecting assets outside of recognized statutory exemptions must be carefully evaluated as to whether they cross the line and are illegal.

Who invented asset protection?

Nobody "invented" asset protection. Debtors have been protecting assets for longer than anybody can remember. Once of the first American cases involving asset protection, the Dr. Luke Barber case, was heard in the colonial courts in 1664.

So what about all these guys who claim that they are the "Father of Asset Protection"?

They are all full of it. One of the problems with asset protection is that there are a bunch of idiots running around making all sorts of outrageous and demonstrably false claims.

The one person who probably is worthy of the title of the "Modern Father of Asset Protection" is Colorado attorney Barry Engel, who effectively kicked off the recent interest in asset protection by drafting a revised Cook Islands trust statute in the late 1980s. While recent case law has raised substantial questions about the effectiveness of offshore trusts, the effect of Barry on asset protection as a business cannot be understated.

But Barry himself does not claim the title of "Father of Asset Protection". The several that do make this outrageously false claim are idiots, and all have one or more sordid facts in their backgrounds that you probably wouldn't want your reputation associated with theirs. If somebody claims that they are the "Father of Asset Protection", run.

Isn't asset protection about all that offshore stuff?

In the 1990s, the term "asset protection" was synonymous with offshore planning, meaning planning in one of the Caribbean or similar jurisdictions that had written their law to thwart creditors. By far most asset protection was then done offshore.

After the Anderson case illustrated the defects of offshore trusts in 1998, after heightened reporting requirements for offshore transactions following the events of 9/11 and the Patriot Act, and with greatly increased IRS penalties for even harmless misreporting of offshore entities and activities, most asset protection has moved back on-shore and is conducted wholly domestically.

We do not, for instance, utilize offshore planning unless our client has a specific, compelling need for such planning, such as that the client has family or substantial business interests outside the United States.

The all-time asset protection

best seller is available from:

Amazon.com

Barnes & Noble.com

About AssetProtectionBook.com

This website is by far the largest and most comprehensive creditor-debtor and asset protection resource available anywhere. This website hosts thousands of pages of articles, cases, statutes, analysis, and many other resources to assist planners and judgment collection professionals in researching contemporary creditor-debtor issues.

While the articles and analysis on this website are most often drafted from a planner's point of view, creditor attorneys and judgment collection professionals will also find many of these resources to be highly useful. We have tried whenever possible to be balanced in our analysis by pointing out strengths and weaknesses in different structures and strategies from both the planner's and creditor's viewpoint.

This website was primarily created to support our book Asset Protection: Concepts and Strategies (McGraw-Hill 2004). Because of the publishing agreement with McGraw-Hill Companies, Inc., certain articles which were used as the basis for that book have been withdrawn from internet publication. It is suggested that the book be used as the primary resource, and that the other materials on this website should be used as supporting materials only as needed.

Available from

Amazon.com

and

Barnes & Noble