ASSET PROTECTION - Does Asset Protection Work?
Many people question whether even
the most complicated and sophisticated asset protection plan
actually defeats creditor’s claims, especially where the
asset protection plan is designed and implemented close to a
judgment being entered or a lawsuit being filed. Evaluating
the effectiveness of asset protection depends on having realistic
goals and objectives. If by asset protection a person means
becoming 100 percent judgment proof, then successful asset protection
is difficult, especially if not done several years before problems
arise. If, however, one’s goal is to substantially improve
their creditor protection and to place the majority of their
assets beyond creditor attack, then asset protection success
is obtainable if done early and with the help of an experienced
asset protection lawyer.
Without any asset protection planning, a client subject to a
potential liability or an actual judgment will lose all assets
not exempt by the law. With professional and advanced asset
protection, collection of a judgment can be made difficult (though
never impossible) and the debtor gains substantial leverage
in negotiating a reasonable settlement of a creditor’s
claim. Therefore, a reasonable goal of domestic or offshore
asset protection is to put yourself in a substantially improved
bargaining position with future creditors.
Most important, asset protection does not involve either hiding
assets or income tax protection. Effective asset protection
does not involve secreting assets, and no one should expect
that asset protection will reduce U.S. income tax liability.
