Professionals and other wealthy individuals often inquire whether assets can be protected from the claims of their present or potential creditors. Asset protection planning must be recognized as an integral part of the estate planning process. Preserving one's wealth is a major concern to anyone serving on a board and to others who could be perceived as deep-pocket targets, including business owners and professionals.

Important questions for attorneys advising such clients are whether estate tax benefits are attainable, whether to use domestic or offshore jurisdictions, and how recent legislative developments and judicial challenges might affect planning strategies.

The lawyer and client must also recognize concerns about fraudulent conveyances, tax debts, client criminal liability, attorney civil liability, and very real professional responsibilities and ethical constraints.

There are numerous techniques available to protect assets and minimize some taxes. Often planning in this area involves a team approach between several experienced estate planners and tax attorneys, as well as criminal, bankruptcy and domestic relations practitioners.

This can be a highly complex and always changing area of legal planning that must be implemented carefully, with full appreciation for what is and is not possible, and with the benefit of expert technical legal advice. Anyone considering the use of an asset protection planning strategy should consider:

• Why it is needed
• Does the need outweigh the potential costs
• Ethical considerations
• Fraudulent transfer questions
• Available bankruptcy and state debtor's exemptions
• The appropriate use of annuities and life insurance in asset protection planning, including the use of offshore life insurance
• Pensions and IRAs
• The importance of tenancy by entireties property
• Community property and domestic relations law
• The use of gifts—outright gifting or in trust—and the potential benefits of spendthrift trusts
• The use of disclaimers for tax reasons and against creditor claims
• The use of limited liability business entities, corporations, and partnerships
• Self-settled trusts, both domestic and foreign
• Structure and drafting considerations
• Whether to import the law vs. export the assets
• Comparison of domestic and foreign trust and debtor/creditor laws and related foreign or domestic jurisdiction selection
• Tax issues and reporting requirements
• Abusive trust questions and IRS attacks
• Many other potential questions and issues

We are willing to discuss these issues and factors unique to your situation if you have a serious interest and a legitimate need for this type of planning. Contact our law office to learn more.