Any
discussion of asset protection among most lawyers, accountants, lenders
or even the general public seems to engender some false assumptions that
the purpose is to run up a lot of bills or to borrow a lot of money and
then stiff your legitimate creditors.
First of all, no
legitimate asset protection attorney will aid a client in doing anything
remotely similar to that because it's an out and out felony for the
attorney as well the client.
Secondly, anyone from whom you borrow a substantial amount of money is
likely to have a secured claim against assets that are worth more than
their claim. Those creditors will get paid.
Third,
any unsecured creditors from whom you buy goods or services can be
repaid by you after bankruptcy so that you can retain your credibility
and reputation with them.
Fourth,
you should have a reasonable amount of liability insurance with which to
adequately compensate anyone who suffers an injury that is caused by
you, members of your family or any employees.
Fifth,
if you establish a sound asset protection plan, you most likely won't
have to take bankruptcy at all and your legitimate unsecured creditors
won't have to suffer any loss. If some ambulance chasing lawyer sues you
on behalf of an angry former employee who is willing to commit perjury
to get even with you, is it moral for your other creditors to lose the
chance of getting repaid because of a preposterous award by a
sympathetic jury?
If you
form a partnership with someone else, you are not morally obligated to
expose all of your personal wealth to their business related errors or
omissions by doing business as general partners. It's not immoral to do
business as a LLC or corporation so that you aren't liable personally
for the acts of your partners or co-owners.
The
basic purpose of asset protection is to balance the scales of justice in
connection with lawsuits that would not only wipe you out but would also
wipe out your family. There is no moral basis for leaving your spouse's
or parents assets exposed to the claims of your unknown future judgment
creditors because of joint ownership.
If you
are concerned about providing for your children's or grandchildren's
college education, there is nothing wrong with taking steps to secure
that money by making transfers now in the form of a trust, limited
partnership or similar entity.
To the
extent that you do not seek to defraud your present known creditors,
there is nothing immoral in placing some of your assets beyond the easy
reach of the legal predators in the U.S... who are taking advantage of a
dysfunctional legal system where fault is seldom an issue in determining
liability. If our legal system regains a moral basis of fairness
between the plaintiffs and defendants, then there might be some small
grounds to question the morality of asset protection. Until then, self
preservation is moral and asset preservation planning is as
well.
There
are two kinds of people in this world. There are those who argue
strenuously that you and everyone else are somehow obligated to
sacrifice yourself to the needs of others. They would have you believe
you should own all of your property in your own name, with no legal
protection, because someday, you might cause some injury to someone. If
that were literally true, then the question is whether they are doing
the same. And for whom is this great sacrifice being made? Is it for
your spouse, your parents, your children or even for someone you
actually know? No. The implication is that you are somehow obligated to
sacrifice yourself, your family and your employees for the un-specified
need of some future unknown person. Of course, there will be a needy
lawyer helping this unknown future person and taking from 1/3 to 40% of
the total award.
The
other kind of people believe that self preservation is a moral right.
They don't feel any obligation or any guilt if they have provided for
their spouse, their children, their parents and indirectly for
themselves, leaving some unknown future person to find another lamb for
the sacrificial meal.
Can
unscrupulous people use legal methods of asset protection to deprive
others of a just claim? Certainly. Automobiles have provided a great
many people with a lot of benefits, but they also kill a lot of people
every year. Nuclear energy can be used to produce electricity or bombs.
Weapons can be used for self defense or to wage war on women and
children. Virtually anything can be abused by those who seek to harm
others. The morality of asset protection is based on the purpose to
which it's put. Like a gun, it can be used for self defense - only when
needed. Or it can be used to harm others.
It's
not the weapon that's immoral. It's the person who is using it.
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