If you’ve looked into asset protection planning, you probably know how it can help keep your assets safe from creditors when you lose a lawsuit. But if that’s the case, why do some attorneys give you reasons to not protect your assets when it’s clearly in your best interest?
As you might have already guessed, an attorney’s reasoning for avoiding asset protection has more to do with them than it does with you. To help you better understand what puts attorneys on edge about this legal field, here are some reasons why lawyers don’t trust asset protection:
- Asset Protection Planning Makes Your Lawyer Feel Obsolete
- Lawyers Worry About How Judges Perceive Asset Protection
- Lawyers Fear Retaliation from Judges
- Most Lawyers Don’t Understand Asset Protection
- Attorneys Want to Protect Clients from Fraudulent Transfer Claims
1. Asset Protection Planning Makes Your Lawyer Feel Obsolete
Countless lawyers make their living constantly fighting court battles against their clients’ creditors. They know that if their client were to hire an asset protection professional and set up an offshore asset protection trust, their billable hours would start to drop off. Think about it. The legal profession is a business. So, while it’s nice to think that a lawyer will always present you with the best option for your money, at the end of the day, many attorneys aren’t just fighting for you. They’re fighting to keep the meter running..
2. Lawyers Worry About How Judges Perceive Asset Protection
Lawyers who argue in court tend to be protective of their reputations. If your attorney knows that a particular judge hates having their judgments impeded by an asset protection strategy, the attorney may warn you off establishing one. After all, your attorney may have to argue dozens of cases to this judge each year. So ending up on a judge’s bad side could put every other case they have in jeopardy. Should you find yourself in this situation, remember, it’s not your job to protect your lawyer’s reputation. It’s your lawyer’s job to protect your money.
3. Lawyers Fear Retaliation from Judges
When a judge really hates how an asset protection plan blocks their judgment, they can “throw the book” at you. Given that an attorney’s job is, in part, to keep you out of legal trouble, they’re going to tell you not to establish an asset protection plan. Despite your attorney’s well-intentioned advice, a good asset protection plan is still worth setting up, as it can endure attacks from even the most persistent judge.
4. Most Lawyers Don’t Understand Asset Protection
In our experience, most lawyers we speak to don’t understand asset protection, which leads them to steer clients away from it. Asset protection is rarely taught in law school. Naturally, since they don’t understand this field, they worry that the benefits it offers are too good to be true. When you combine a lack of understanding with the fear that asset protection planning could backfire, it’s no wonder most lawyers don’t recommend it to their clients.
5. Attorneys Want to Protect Clients from Fraudulent Transfer Claims
A lawyer wants to keep their client out of legal trouble whenever possible. While it’s a good instinct, it can cause some attorneys to become overly cautious. Case in point, lawyers will often list fraudulent transfer claims as a reason to not protect assets. Unfortunately, many lawyers forget that because a fraudulent transfer claim is only a civil matter, there are no serious penalties for committing one. Moreover, offshore asset protection structures can withstand such a civil attack.
Think about it this way: If you create a trust and then move assets into it after losing a lawsuit, someone can seek a fraudulent conveyance claim against you. At this point, there are three possible outcomes:
- The court determines you have committed fraudulent conveyance and forces you to hand the transferred assets over to your creditor.
- The court finds that you did not commit a fraudulent transfer and your assets remain out of your creditors’ reach.
- The court determines you have committed fraudulent conveyance but your assets are in a trust in an offshore jurisdiction that will not enforce the ruling.
As you can see, there is one bad outcome and two good outcomes. However, if you don’t set up asset protection, you’re guaranteed to lose money after losing a lawsuit. Fraudulent conveyance rulings don’t carry any extra penalties in most states. It’s often better to chance a fraudulent conveyance ruling than throw your hands up and fork over all your assets to your creditor without a fight.
Don’t Take Bad Legal Advice: Set Up an Asset Protection Plan
Ultimately, there are no compelling reasons to not protect assets. Yes, your lawyer may protest and provide plenty of objections when you try to create an asset protection plan. However, having one in place is a choice only you can make. Once you establish one, you can rest easy knowing that your wealth is safe from creditors, even if your lawyer doesn’t win a case against them.
Don’t let bad legal advice put your wealth in jeopardy. Schedule a free consultation with Asset Protection Planners to start setting up your wealth defense strategy.
