While Asset Protection is 100% legal, the moral or ethical quandaries are another issue entirely. Some people believe it’s unethical or improper to shelter their assets from those who have a rightful claim. But these folks might then think about Asset Protection as financial self-defense to discourage frivolous and harassing lawsuits and to make them a less likely lawsuit target. They’ll live life more confident about their financial security.
Of course, one can always pay or favorably settle any claims they feel morally obliged to pay, and our clients oftentimes do – to assuage their conscience. And that’s their prerogative. But if they’re unprotected, they have no choice. They can be wrongfully stripped of their wealth. That’s what we want to prevent.
August 2018 Webinar Rebroadcast: Asset Protection Myths and Fallacies
We can better make the case that those who don’t safeguard their families’ security are negligent, and in breach of their own self-obligation. Likewise are their lawyers who defend them on a serious case and never suggest that they fortify their assets in the event they lose their lawsuit. Yet few defense lawyers offer such common sense advice. It’s sad. Inevitably their clients pay the price for their lack of common sense.
We can also look at the ethics of Asset Protection from another perspective. Is it unethical to file bankruptcy to eliminate debt? Is it unethical to use corporations or limited liability companies to limit your personal exposure from business debts? Is it unethical to keep your home or retirement accounts that may be exempt from creditor seizure?
Most people would think not because the law makes it permissible. Asset Protection planners only take advantage of the statutory and case law that in one way or another shields assets. But ultimately, whether or not to pay a claim must be left to the client’s conscience.