There are some creditors against whom asset protection is extremely difficult. These creditors include government agencies such as the IRS, SEC, and FTC, and your spouse. Government creditors are provided by Congress with extraordinary collection remedies. A federal agency can often lien property or freeze accounts without warning and without posting a bond if they suspect you of wrongdoing.
Essentially government creditors can attack suspected wrongdoers like the mob in an old western movie, “lets hang ’em and then we’ll try ’em.”Even the most sophisticated offshore planning and moving cash to offshore accounts is not a foolproof asset protection against the government.
The other creditor with powers far beyond those of mortal civil creditors is your spouse. Marital courts are have powers of equity, which means in this context, the judge can give whatever property you have to your spouse as part of a separation decree even if the asset is otherwise protected from civil judgment creditors.
In addition there are some severe federal penalties for people including attorneys who assist someone protecting assets from federal government creditors or for assisting people in hiding assets from the government.
Page last updated on May 22, 2020