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AMBRECHT & ASSOCIATES
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Resources Pertaining to Asset Protection
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Asset ProtectionA properly drafted, implemented, and administered foreign asset protection trust (or implementation of other asset protection strategies) is a viable option for clients with wealth which could have future exposure to unknown future creditors. For example, after sale of a business, or after a public offering of securities, or for successful professionals -- any situation where wealth is generated but accompanied by the ever-present risk of litigation or lawsuits -- a foreign asset protection trust may be prudent. Asset protection strategies are not tax shelters and do not avoid taxes. Other asset protection strategies may be accomplished with various trust structures (domestic and foreign), entity structures (domestic and foreing), or choosing a more advantageous domestic jurisdiction (i.e., taking advantage of the laws of various states in the US). An asset protection plan will include one or more lawful transfers of assets and creation of entities or other structures to hold assets, all done for business or estate planning purposes but which have the effect of reducing the ability of unforeseen future creditors being able to reach the assets. The legality of using asset protection planning options to protect clients from creditors has been affirmed by the U. S. Supreme Court in Grupo Mexicano de Desarrolo S. V. v. Alliance Bond Fund, Inc. (1999) 119 S.Ct. 1961. The Supreme Court indicated that a debtor transferring assets to avoid a future unforeseen creditor can be acting entirely within the law, and can be doing so in a what that the Court states is "entirely predictable." We now include a discussion on asset protection planning in all our estate planning and family business planning services. Strictly ethical, we comply with the California and ABA rules of professional conduct, the Uniform Fraudulent Transfer Act (adopted in California and as part of the U. S. Bankruptcy Code), and all applicable laws.
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