What Other Areas of Law Should an Estate Planning Attorney Be Familiar with Before Practicing Asset Protection Planning?
As an estate planning lawyer from a firm like Yee Law Group can explain, estate planning is a very broad area of the law that deals with the many ways you can conserve, protect, and distribute your assets to achieve your goals for your family’s financial well-being now and in the future. Your experienced estate planning lawyer acts as your guide throughout the entire process, not only offering sound legal and financial advice but also drafting the various documents that make up your estate plan.
What Is Asset Protection Planning?
Asset protection planning is a subset of overall estate planning that deals with the most effective ways in which you can protect your assets from creditors or judgment holders in the event someone sues you and obtains a large jury award. If you have accumulated substantial wealth and, in addition, are a high-income executive or professional, you are at particular risk for being named a defendant in these types of lawsuits since potential plaintiffs see you as a “deep pockets” individual with more than adequate assets to pay whatever judgment they may obtain against you.
What Is an Asset Protection Trust?
An asset protection trust is an excellent way for you to protect your assets from invasion by creditors, judgment holders and even a disgruntled former spouse. However, as you might expect, these irrevocable trusts are complicated and complex, both to establish and maintain. Consequently, in addition to being exceptionally well versed in overall estate planning issues and techniques, your attorney should also have extensive knowledge in the following areas:
- Fraudulent transfer and conveyance law, especially the Uniform Fraudulent Transfer Act and the Uniform Fraudulent Conveyance Act
- Business law
- Debtor/creditor law
- Taxation law
- Bankruptcy law
- International law
Why the Need for International Law Knowledge?
Unfortunately, only 16 U.S. states authorize domestic asset protection trusts, called DAPTs. If you don’t live in one of these states, your wisest option may be to establish an offshore asset protection trust, called an OAPT. This is why your estate planning attorney needs to have more than a passing acquaintance with international law.
Experts list the Cook Islands, Nevis and Belize as the jurisdictions most friendly to debtors and therefore to OAPTs. Not only are the fraudulent conveyance laws of these countries considerably more liberal than those of the United States, but they also have shorter statutes of limitation.
Deciding whether an asset protection trust is right for your needs and, if so, in which state or country to establish it, are crucial decisions that you need to make after extensive consultation and strategizing with your estate planning lawyer. In other words, this trust should be specific to your needs.