Never confuse secrecy or concealing assets with Asset Protection. Financial privacy can be helpful, but once you're sued you can no longer
rely upon secrecy because a judgment creditor can compel you to disclose
your assets. You're left with two options:
If you truthfully disclose your assets, you lose secrecy
If you conceal your assets, you commit perjury
That's not legitimate Asset Protection.
You want an Asset Protection plan that lets you fully disclose your assets,
confident that they'll remain safe from your creditor. A judgment
creditor can force financial information disclosure through deposition,
interrogatories, requests to produce documents or subpoena your records
and information from third parties.
Judgment creditors can, and do, find debtors' assets. Loan and credit
applications, bank records, tax returns, court cases (such as prior divorce
that discloses assets) and insurance policies all provide clues. The paper
trail is revealing.
Computers expose our financial lives. Judgment creditors and prospective
litigants often use professional asset search firms to find concealed
assets. These firms can financially profile you with stunning accuracy.
Forensic accounting firms trace deviously and secretly-deployed wealth.
Keep your plan
100% legal and avoid playing "hide the assets" games. Your creditor will
probably find your assets.
Convince a Claimant that You're Simply Not Worth Suing
The sounder policy? Tell your claimant early in the game exactly what assets
you own and how they are titled. Most importantly, explain precisely why
they are beyond creditor reach. Make Asset Protection your selling tool.
The cold hard reality of litigation, from an attorney's perspective
at least, is that it's almost always all about money. Attorneys work
for a living. They have bills to pay like everyone else. Although they
often represent clients on a contingency fee basis, they'll normally
do so only if they believe they'll get paid. If a potential defendant
has no exposed assets, the attorney won't get paid.
Most plaintiffs' attorneys first do an asset search on a potential
defendant before taking on a contingent fee case. If their search reveals
few unprotected assets, the attorney is then uncertain whether he will
get paid for his efforts. Even if the Asset Protection plan is pierced,
the process may be lengthy, expensive, and uphill. The attorney will then
insist on an up-front retainer before accepting the case. This shifts
the risk of suing a defendant and losing (or being unable to collect)
to the plaintiff, who now realizes their lawsuit can be an expensive,
Avoid Being the Easy Target
Other than lawsuits with the potential for large judgments against wealthy
(albeit asset protected) individuals, attorneys and would-be plaintiffs
usually opt for easier prey. This is basic animal nature. A pack of predators
stalking a herd go for the easiest kill.
With that said, people who think they are well-protected may not be. The
predator/litigant determines that an apparent defense is only smoke and
mirrors. The defendant is surprised to lose his or her assets. They learned
too late that you can't have illusory protection;
you need solid, effective Asset Protection.
As Asset Protection Attorneys, The Presser Law Firm P.A. sees many well-protected
clients threatened with litigation, only to have the threat fizzle. The
effectiveness of protection is most striking when several co-defendants
are sued. The protected clients are dropped from the suit, which proceeds
full-steam against the unprotected, deep-pocket defendants, like a predator
going in for an easy kill.