Clients often tell me of their frustrated attempts to get competent asset protection advice from attorneys who work in large law firms. Attorneys in traditional, “tall building” firms take a dim view of asset protection planning. As an example, a colleague attended last week a seminar on Florida asset protection taught by an attorney in one of Florida’s silk stocking law firms. The instructor taught that any transfer or conversion of assets that is later found to be a fraudulent transfer in violation of Florida’s fraudulent transfer statutes constitutes criminal fraud. Accordingly, any attorney who assists or advises a client to make a transfer of property subsequently reversed by a court as a fraudulent conveyance is engaged in assisting the commission of a crime. Such attorney, according to the instructor, is not only unethical but may himself be subject to civil remedies and criminal prosecution.
The problem with this opinion expressed authoritatively to other lawyers at a teaching seminar is that the view is unsupported by Florida law and has been rejected essentially by Florida courts. There is not statute that deems a fraudulent conveyance to be a criminal violation or punishable by fines or incarceration.
The Florida Supreme Court and lower appellate courts have thus far consistently found that the fraudulent conveyance statutes are creditor recovery remedies only and they impose no additional civil liability on the debtor or any third party who assists the debtor. Some Florida judges have expressed contrary views in dissent opinions, and other state courts have reached contrary conclusions based on their own state’s laws. Florida law, however, is based not on minority views or foreign law, but rather on the decisions by the majority including the Supreme Court.
I find many attorneys in large, traditional law firms who share the opinion that asset protection planning involving property transfers intended to shield assets from creditors is wrongful, unethical, and even criminal. I think the objection expressed by some attorneys is in fact based on their moral objections to asset protection rather than on rational legal analysis.
Many people feel that asset protection is immoral to the extent it avoids paying people to whom debtors are both legally and morally obligated. I have never tried to convince other attorneys to change their moral views. People who morally oppose asset protection should not provide legal advice in this area and should refer clients with questions to other attorneys who are both qualified and comfortable providing such legal services. It is dishonest to translate personal moral objections to asset protection, or any other areas of law, in to condemnations of asset protection based on non-existent criminal statutes or misrepresentations of prior court decisions.
I expect some readers disagree.
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