The United States Declaration of Independence lists “Life, Liberty, and the pursuit of Happiness” as three of the most important examples of “certain unalienable Rights” inherent in every human being. You’d be hard-pressed to find an American unfamiliar with these proclaimed privileges, and yet many Americans are unaware of the source material from which the minds behind the Declaration pulled this trinity of natural rights. They were drawing from the works of, among others, the political philosopher John Locke, whose own formulation of the three natural rights, in fact, read “life, liberty, and estate.”
As Sir William Blackstone, a monumental figure in the history of English common law, famously declared in his Commentaries on the Laws of England: “[t]he third absolute right, inherent in every Englishman, is that of property: which consists of the free use, enjoyment, and disposal of all his acquisitions, without any control or diminution, save only by the laws of the land.”
Asset Protection and estate planning rest, fundamentally, on one’s right to dispose of their property as they see fit. The freedom to sell or transfer property during one’s lifetime is referred to as the right of “alienation;” the right to transfer one’s assets upon their death according to thier wishes is known as “freedom of disposition.” Asset Protection, a practice rooted in the right of alienation, and estate planning, a practice arising from our freedom of disposition, together form a powerful dyad in the law which can be ethically and legally utilized by the American citizenry to protect and pass on their wealth.
Asset protection strategies, which may involve the transferring of certain exposed assets to protective entities and the conversion of other exposed assets to exempt property, derive their legal legitimacy from our right of alienation and help ensure that our hard-earned wealth is protected from financial calamity and frivolous litigation during our lifetimes.
Estate planning strategies, which involve the use of legal instruments such as the Last Will & Testament and the Trust, derive their legal legitimacy from our freedom of disposition and help ensure that our assets pass according to the dictates of our own conscience (rather than according to the often-ill-informed whims of the state).
If you’re thinking of creating your own financial fortress using both Asset Protection and estate planning strategies, know that you are embarking upon a path of financial responsibility and fiscal foresight that is in keeping with the spirit of civil and economic liberty at the heart of both English common law and America’s founding. In the words of John Adams, “[p]roperty must be secured or liberty cannot exist.”