Principles of Asset Protection Planning

The following are thirteen principles of Asset Protection planning that everyone should follow:

1. Create layers or "firewalls"

At The Presser Law Firm, P.A., we construct multiple "firewalls" as part of our Asset Protection practice to ensure that if a creditor breaks through one line of defense that they are stopped at the next strategic barrier. This layering of firewalls is fundamental to comprehensive Asset Protection and requires extensive experience in defensive strategies and the understanding of the complexities regarding every type of legal challenge. From our years of experience in Asset Protection, we know which firewalls to use and when to add firewalls based on a potential or imminent threat.

The key to effective Asset Protection is to try and plan for all the potential threatening scenarios that may occur before you incur a liability. However, responding to a threat when it becomes evident can allows the creation of firewalls that are designed to defend against the new risk factor.

New risks often don't require massive firewall creation because they are sometimes covered by insurance or a lawsuit could be quickly and favorably settled. That being said, all of our plans entertain a full complement of risks and have provisional considerations for rapid firewall creation based on the thousands of client experiences we have had in our many years of legal practice.

2. Diversity your assets

We recommend deploying assets into numerous protective baskets as part of a sound planning strategy. Should you become the victim of a lawsuit or legal claim, we advocate making your creditor work as hard as possible to identify and then attempt to make a legitimate claim to any of the assets. This Asset Protection practice makes asset recovery difficult, expensive and time-consuming for a creditor and can serve as a deterrent to many collection efforts.

Diversification is particularly important when protecting significant wealth. The Presser Law Firm frequently designs multiple isolated "baskets" of assets that are entirely dissimilar to all others. Combining this practice with the layering of firewalls and other techniques creates an exceptionally strong shield and insurmountable obstacle to even the most determined creditor.

3. Adopt counter-offensive strategies

We use a variety of tactics to make your assets unattractive to a creditor, including designing a strategy to make an LLC or limited partnership creditor liable for any taxes owed by the holder or potentially be obligated to post a substantial bond to make a claim on an asset. These are just two counter-offensive measures that are an important part of our Asset Protection arsenal that make creditors think twice before making an attempt to act against well-protected assets.

4. Customize your plan

In the world of Asset Protection, there really is no "boilerplate" approach or single way to protect everyone. Each plan must be customized for each client in order for it to be effective and defensible under the distinctive scenarios of their asset structure and long-term needs. Any asset planning professional that indicates otherwise is either inexperienced or has a limited repertoire of solutions—or possibly has financial interest in steering a client into a particular insurance or investment strategy.

Customization allows a protection designer to implement the most applicable tactics, which can vary wildly between unique types of individuals, trusts, professionals and businesses. Some situations call for, by way of example, an offshore trust while another situation could require accounts receivable protection. For these (and many other) reasons, it is essential for each plan to be customized around the client.

Other factors to consider in customizing an asset protection program:

• Your state of residence.
• The value of each asset.
• The range of liabilities you might be exposued to.
• Stage of defense: preventative or crisis.
• Tax considerations.
• Estate planning needs.
• Legal and other costs.
• Marital status.
• Your age and current liquidity.

5. Update your protection

Keeping your Asset Protection plan in sync with the many changes in your life and your business is essential and is one of the leading causes of a breach of integrity. Divorce, business dealings, a lapse of particular threats, or the acquisition of new assets or wealth all mandate a careful review of any Asset Protection program.

Also, laws change frequently and different states can reinterpret statutes without being required to notify you. Accordingly, a change of venue for protection could be an essential requirement to ensure the ongoing and uninterrupted benefit of an Asset Protection plan.

The Presser Law Firm, P.A. recommends an annual review of every plan.

6. Protect all of your assets

Many Asset Protection plans fail to entertain certain types of assets such as copyrights, patents, notes receivable, claims against others, etc. These and other assets that can be or can be perceived to be exempt or self-protected are often ignored and can be inadvertently exposed in the future. For this reason, a complete inventory of personal, business and intangible assets should be protected at the formation of a plan and annual review of the plan should determine whether any revisions are advisable.

7. Start with a flexible plan

Any initiative to protect your assets is a great first step but rarely entertains the full spectrum of threats that exist—ranging from a routine civil lawsuit to divorce to a business failure over a lifetime. Designing a plan that has the ability to be extended to this range of defensive needs is important from day one. As a business or a family fortune grows, all types of new risks present themselves and a good Asset Protection plan should be extensible to address many different types of protection.

8. Keep you plan completely legal

Asset Protection is a widely recognized practice area in the legal community and many experts advise clients on safe, legal and intelligent ways to protect their economic interests through the implementation of comprehensive plans.

The purpose of any quality plan is to protect assets—not to jeopardize them because of illegal formation practices, unlawful transfer or fraudulent conveyance. Unfortunately, many individuals resort to some of these practices in a moment of panic to try and protect themselves, in reality they only aggravate a complex situation by breaking the law.

We advise our clients how to legally and legitimately form a shield around their assets using moral and ethical techniques that are practiced by lawyers across the U.S. and in many other parts of the world to deliver optimal protection under the letter of the law.

9. Keep your plan simple

Simplicity is an art that we practice at The Presser Law Firm, P.A.—even with complex legal affairs—because complexity can lead to unnecessary cost and the risk of a detail being misinterpreted in the future or creating a barrier to a protective strategy.

Over-planning is a chronic mistake that is expensive for clients and introduces risks that can potentially unravel a protection shield. While layering multiple firewalls is necessary during times of duress, we can frequently accomplish an equal or even superior plan with less complexity in a majority of engagements.

10. Control cost

The cost of an Asset Protection plan need not be expensive and should never be established based on the value of assets. We recommend that each client survey a number of advisors before making a selection and base their selection on the experience and references of legal counsel and not exclusively on cost, though we know that cost is always a factor.

Many attorneys quote extremely low prices for a plan to bring a client into their practice and deliver a plan that reflects the low cost—not the clients full spectrum of needs. Conversely, some firms quote very high prices and set the expectation that cost dictates the level of sophistication of a plan, which we know is not always the case.

11. Integrate a protection plan with other goals

Asset Protection is not a financial planning process—it's a defensive strategy that should be integrated with estate planning, investment planning and retirement planning to provide the most effective results. Asset Protection is a specialized area of law and most competent advisors in other areas of wealth planning and protection will direct their clients to a professional with the experience and skills to tightly integrate Asset Protection with financial planning.

12. Minimize and contain liability

An important and frequently overlooked benefit of Asset Protection is its ability to help minimize exposure by dispersing assets into different 'baskets' and have each basket protect from select liabilities. This practice is an artful strategy that requires attorney skill and experience and can become the centerpiece of a comprehensive plan.

13. Make sure your plan works!

The effectiveness of an Asset Protection plan is rarely tested until a challenge is made to your assets—which is not the optimal time to discover a non-working component of the plan. We design plans around years of experience and rely of safe, proven techniques to ensure the integrity of every protective tactic and make sure that it is defendable, legal and effective.

CHOOSE THE RIGHT ASSET PROTECTION ATTORNEY!