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Asset Protection Planning
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!!Asset Protection Opinions
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!!Asset Protection Topics And Opinions
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!!Additional Resources
[[ApBookArticles | Book And Articles On Asset Protection Planning]]
https://creditordebtor.com/images/apbook.jpeg
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The most important requirement of asset protection is that it must be done in advance of an event giving rise to liability of the person doing such planning. Once such an event has occurred, then the planning done by the person is not asset protection planning at all, but will very likely to be considered fraud on creditors by the courts. Thus, it is sometimes said that asset protection can only be done under the condition which pilots refer to as "severe clear" meaning in this context that there are not even any potential creditor issues on the horizon. Once a claim has arisen, however, it is very easy for a debtor to make the situation worse, and potentially much worse, by trying to engage in what otherwise would have been appropriate asset protection planning. The results for after-the-claim planning have included:
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The most important requirement of asset protection is that it must be done in advance of an event giving rise to liability of the person doing such planning. Once such an event has occurred, then the planning done by the person is not asset protection planning at all, but will very likely to be considered fraud on creditors by the courts. Thus, it is sometimes said that asset protection can only be done under the condition which pilots refer to as "severe clear" meaning in this context that there are not even any potential creditor issues on the horizon. A common practice for asset protection attorneys is to obtain an ''Affidavit of Solvency'' from their client doing such planning, which documents that the client is free of any claims, is solvent, and will remaint solvent even after any planning has been completed -- this is more to protect the planner from liability to the creditor, and from ethical sanction from the state bar authorities, than to benefit the client.
Once a claim has arisen, however, it is very easy for a debtor to make the situation worse, and potentially much worse, by trying to engage in what otherwise would have been appropriate asset protection planning. The results for after-the-claim planning have included:
Once a claim has arisen, however, it is very easy for a debtor to make the situation worse, and potentially much worse, by trying to engage in what otherwise would have been appropriate asset protection planning. The results for after-the-claim planning have included:
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!!Asset Protection Usually Involves Trusts
The primary tool long used in asset protection planning is the ''trust'', whereby the person funding the trust (the ''settlor'') can accomplish a legal distancing of their former assets from themselves by placing their assets under an agreement with a third-person (the ''trustee''), yet preserve the assets for the beneficial use of others, usually spouses and children (the ''beneficiaries''). Thus, much of the discussion relating to asset protection planning -- perhaps too much so -- revolves primarily around the use of trusts. There are also trusts that persons create for themselves (known as ''self-settled trusts'' or sometimes ''asset protection trusts''), as allowed by the laws of some states, that may create asset protection benefits outside of bankruptcy. Trust may be domestic or in a jurisdiction outside the United States (generically referred to as ''offshore''). While traditional non-self-settled estate planning trusts have usually held up quite well against creditors, the same cannot be said for self-settled trusts either domestic of offshore.
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!!Asset Protection Opinions
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Asset Protection is planning that is undertaken by a person in the event that a claim which gives rise to liability against that person occurs later and they become a debtor. The fundamental idea is that the person will "take chips off the table" by transferring title to certain assets to some form of protective legal structure, which is known as an ''asset protection structure''. If the person does eventually have a claim arise against them which is unresolved and proceeds to a judgment, the person (now a debtor) will be able to truthfully and successfully disclaim any rights in the transferred assets such that creditors will not be able to proceed against those assets.
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Asset Protection is planning that is undertaken by a person in the event that a claim which gives rise to liability against that person occurs later and they become a debtor. The fundamental idea is that the person will "take chips off the table" by transferring title to certain assets to some form of protective legal structure, which is known as an ''asset protection structure''. If the person does eventually have a claim arise against them which is unresolved and proceeds to a judgment, the person (now a debtor) will be able to truthfully and successfully disclaim any rights in the transferred assets such that creditors will not be able to proceed against those assets. If done in the absence of any claims, asset protection planning can be completely lawful.
!!Must Be Done In Advance Of Any Claim
!!Must Be Done In Advance Of Any Claim
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Note, however, that it may be entirely appropriate under many circumstances for the debtor to take advantage of state-law creditor exemptions.
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Note, however, that it may be entirely appropriate under many post-claim circumstances for the debtor to take advantage of state-law creditor exemptions, but such a debtor would certainly want to get quality legal advice on the subject before actually doing anything.
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# Denial of discharge for the debtor under Bankruptcy Code sec. 727.
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# Denial of discharge for the debtor and/or claims under Bankruptcy Code sec. 727.
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The most important requirement of asset protection is that it must be done in advance of an event giving rise to liability of the person doing such planning. Once such an event has occurred, then the planning done by the person is not asset protection planning at all, but will very likely to be considered fraud on creditors by the courts. Thus, it is sometimes said that asset protection can only be done under the condition which pilots refer to as "severe clear" meaning in this context that there are not even any potential creditor issues on the horizon.
to:
The most important requirement of asset protection is that it must be done in advance of an event giving rise to liability of the person doing such planning. Once such an event has occurred, then the planning done by the person is not asset protection planning at all, but will very likely to be considered fraud on creditors by the courts. Thus, it is sometimes said that asset protection can only be done under the condition which pilots refer to as "severe clear" meaning in this context that there are not even any potential creditor issues on the horizon. Once a claim has arisen, however, it is very easy for a debtor to make the situation worse, and potentially much worse, by trying to engage in what otherwise would have been appropriate asset protection planning. The results for after-the-claim planning have included:
# Punitive and conspiracy damages for fraudulent transfers against the debtor and transferees
# Civil RICO trebled damages against all involved in the planning.
# Denial of discharge for the debtor under Bankruptcy Code sec. 727.
Note, however, that it may be entirely appropriate under many circumstances for the debtor to take advantage of state-law creditor exemptions.
# Punitive and conspiracy damages for fraudulent transfers against the debtor and transferees
# Civil RICO trebled damages against all involved in the planning.
# Denial of discharge for the debtor under Bankruptcy Code sec. 727.
Note, however, that it may be entirely appropriate under many circumstances for the debtor to take advantage of state-law creditor exemptions.
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!!Introduction
Asset Protection is planning that is undertaken by a person in the event that a claim which gives rise to liability against that person occurs later and they become a debtor. The fundamental idea is that the person will "take chips off the table" by transferring title to certain assets to some form of protective legal structure, which is known as an ''asset protection structure''. If the person does eventually have a claim arise against them which is unresolved and proceeds to a judgment, the person (now a debtor) will be able to truthfully and successfully disclaim any rights in the transferred assets such that creditors will not be able to proceed against those assets.
The most important requirement of asset protection is that it must be done in advance of an event giving rise to liability of the person doing such planning. Once such an event has occurred, then the planning done by the person is not asset protection planning at all, but will very likely to be considered fraud on creditors by the courts. Thus, it is sometimes said that asset protection can only be done under the condition which pilots refer to as "severe clear" meaning in this context that there are not even any potential creditor issues on the horizon.
Asset Protection is planning that is undertaken by a person in the event that a claim which gives rise to liability against that person occurs later and they become a debtor. The fundamental idea is that the person will "take chips off the table" by transferring title to certain assets to some form of protective legal structure, which is known as an ''asset protection structure''. If the person does eventually have a claim arise against them which is unresolved and proceeds to a judgment, the person (now a debtor) will be able to truthfully and successfully disclaim any rights in the transferred assets such that creditors will not be able to proceed against those assets.
The most important requirement of asset protection is that it must be done in advance of an event giving rise to liability of the person doing such planning. Once such an event has occurred, then the planning done by the person is not asset protection planning at all, but will very likely to be considered fraud on creditors by the courts. Thus, it is sometimes said that asset protection can only be done under the condition which pilots refer to as "severe clear" meaning in this context that there are not even any potential creditor issues on the horizon.
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(:title Asset Protection Planning:)
(:Summary: Asset Protection, Creditor Debtor Judgment Enforcement Collection:)
(:description Asset Protection, Creditor Debtor Judgment Enforcement Collection:)
(:keywords asset protection, creditor, debtor, judgment, enforcement, collection:)
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(:keywords asset protection, creditor, debtor, judgment, enforcement, collection:)
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