Estate Planning Advice: Asset and Family Protection – Part One

Estate Planning Advice: Asset and Family Protection – Part One

INTRO: Here’s a subject that both intrigues and confuses many people – asset protection. This article focuses on practical steps you can take to try to protect your assets. Of course, protecting your assets is ultimately about the vitally important protection of yourself and your loved ones.

The term “asset protection” is defined and used in many different ways. Here, I use it to describe various methods by which people try to protect their assets, and thus themselves and their loved ones, from prospective “judgment creditors” – those in our litigious society who might successfully sue and obtain a judgment against you.

A retired former business owner (who, along with his wife, are among my favorite long-term clients) has scheduled an estate planning review meeting for January. In anticipation of the meeting, he sent me a N.Y. Times article titled the “Paradise of Untouchable Assets” – the Cook Islands. The author describes, and quotes the opinions of a number of experts about, this international asset protection haven. A growing number of wealthy foreigners, including hundreds of Americans, proactively park the bulk of their assets there. Cook Islands has strict bank secrecy laws and the courts there generally disregard foreign (e.g. U.S.) court orders. Hence, creditors here have a very difficult time enforcing judgments against an American’s assets there.

In his note to me, this client postulated that in these days of tremendous deficits and unfunded government liabilities, the government appears to have two choices – one, to confiscate private property; two, to make the dollar worthless. In light of this, he wondered whether transferring assets to the Cook Islands or some other such vehicle might make sense.

I have great respect for my client, who is very smart and curious, and is not as radical as he may sound. Offshore accounts have surface appeal – particularly to those with millions of dollars in assets and in high risk occupations or who have other reasons to fear being sued. I’m not an expert on these strategies, but based on what I’ve heard and read, they come with substantial risks, including the uncertainty of foreign governments and international politics. Accordingly, these strategies may or may not ultimately work; and meanwhile, the poison of worrying about that is likely not worth the supposed cure.

PART TWO: Rob suggests the best ways to try to protect you assets in Asset and Family Protection – Part Two

This article is intended to provide information of a general nature, and should not be relied upon as legal, tax, financial and/or business advice. Readers should obtain and rely upon specific advice only from their own qualified professional advisors. This communication is not intended or written to be used, for the purpose of: i) avoiding penalties under the Internal Revenue Code; or ii) promoting, marketing, or recommending to another party any matters addressed herein.

Mr. Silverman is an attorney with R. Silverman Law Group, 1855 Olympic Blvd., Suite 125, Walnut Creek, CA 94596; (925) 705-4474; rsilverman@rsilvermanlaw.com.

ESTATE & TRUST ADMINISTRATION: Need to find an experienced estate & trust administrator in Walnut Creek CA? Contact Robert Silverman at 925-705-4474 for legal advice on a Revocable Living Trust, “Summary” Estate Administration, Trust/Estate Beneficiary Representation and Will & Trust Disputes.

Next Estate Planning Advice: Asset and Family Protection – Part Two

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