For most businesses (and many individuals), an asset protection program is an important component of common-sense risk avoidance. In many cases a few simple measures will suffice to provide excellent protection from potential lawsuits and other potential liability. It is seldom necessary or even advantageous to go offshore. Asset protection often goes hand-in hand with tax planning, financial planning, and estate planning. In that context, although some plans can be implemented very quickly, the best plans are implemented years in advance.
We frequently work with tax advisers and financial planners. Since unlike attorney-client communications, communications with tax advisers or financial planners are not privileged, we recommend that any sensitive matters of concern, such as prenuptial planning, family conflicts, questions of legality, or specific concerns about potential future liability, be discussed with us first.
In order to properly function, asset protection measures must be practical, simple, and realistic, and they must take into account “worst case” scenarios. For example, so-called domestic (non-offshore) asset protection trusts set up in one state may be ignored at the federal level or by other states. A homestead exemption means little if the amount of the mortgage is near the market value. In any event, there are many practical measures that, when properly selected and implemented, can effectively protect business and personal assets.