THE Legacy Hierarchy™


Many times we are asked questions about asset protection. This week I will review some of the basic trends and ideas in this area.

What is asset protection? Simply put, asset protection are the strategies and tactics to protect what you own against potential or future creditors.

What are some of the basic rules of asset protection? Some of the basic rules are as follows:

Fraudulent Conveyance

1. If a person transfers assets for less than fair value with the intent to hinder, delay or avoid paying a creditor that is what is called a fraudulent conveyance. A fraudulent conveyance can be set aside bringing assets back into ownership where the creditor can collect.


2. A fraudulent conveyance can be a crime and you can go to jail. Yes jail. I know people take this area of moving their money around to avoid creditors way too lightly and they think this is simple stuff. It isn’t. Moreover, anyone attempting to do this against a governmental agency like the IRS or State income tax agency is just begging for trouble.

Helping others

3. Anyone who participates in the plan to avoid or hinder or delay creditors also can be liable for a misdemeanor and go to jail. This is the don’t ask your attorney to participate in this kind of scheme because the attorney can lose his license.

Have I scared you? Good. Now we can talk about opportunities to plan to protect your assets.


1. People set up corporations, partnerships and limited liability companies to separate their business assets from their personal assets and to protect the personal assets from creditors of the business and this is perfectly legitimate.

Estate Planning

2. People do income and estate planning, key words, income and estate planning for a variety of reasons and many of the income and estate planning strategies provide substantial asset protection.


3. We eliminate the idea that the planning is done for asset protection reasons. Now it is no longer asset protection.


1. A person wants to establish an entity to separate business from personal. Nothing wrong here. No creditors, no judgments, no problem.

2. A person wants to do estate planning setting up entities and trusts for the benefit of children and/or grandchildren. Nothing wrong here. No creditors, no judgments, no problem.

3. A person has been sued. Their net worth is over 5 million but the judgement is $50,000. Asset protection isn’t going to happen here. Client has a net worth over 10 million. They own real estate and have personal guarantees. There are no judgements or lawsuits. There are a variety of strategies that are favorable in protecting this person’s net worth.

4. A person has a judgment against them. They want to protect their assets? Tread carefully.

Our firm with over 28 years of expert tax and legal experience have worked with many clients in establishing plans that are legitimate, legal and involve family, financial and management benefits and do not raise any question about nefarious intentions. This is particularly true because almost all our work involves estate planning in some way. If you are concerned in today’s litigious times about doing more for your family we are here to serve and add value to your interests. Please contact our office for more information.

Next week we will take a right turn and talk about the thankless job. Stay tuned.

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