Protecting liquid capital, real estate, and other assets is a major concern for all high-net-worth individuals, ranging from successful entrepreneurs to physicians to famous artists and more. After all, as you accumulate wealth and real estate, you become a more attractive target for disgruntled customers, ex-business partners, creditors, and other potential legal attackers.
That’s why you need to invest in asset protection ASAP. But stellar asset protection doesn’t come easy, and you can’t develop and maintain a strong asset protection strategy by yourself. You need the assistance of a knowledgeable asset protection attorney.
Asset Protection Explained
Asset protection is a detailed and multifaceted strategy that revolves around protecting assets – such as real estate, liquid capital, stocks, property, and more – from legal attack.
For example, say that you are a successful entrepreneur and you’ve built up a business from scratch. Money rolls in over time, and now you have a net worth of $30 million. Congratulations!
However, your former business partner now wants to sue you by claiming that they deserve half of the business success pie, even though they left right at the beginning of the company when things were difficult. If that former business partner is successful with their lawsuit, you could be forced to pay them an exorbitant amount of money.
So, does asset protection prevent a lawsuit like that from succeeding? Not necessarily (though it often does). More importantly, asset protection means that even if your legal opponent is successful in their lawsuit, they won’t be able to get your assets whatsoever.
Imagine an invading army breaching the walls of your asset castle. They quickly descend to the vaults, but when they get there, they find they are totally empty. Even better, they find that you’ve somehow transported the vaults away, so the entire attack was meaningless.
That’s what asset protection means. It doesn’t stop people from suing you. It stops people from taking what’s rightfully yours.
So, What Does an Asset Protection Attorney Do?
Asset protection attorneys are, you guessed it, knowledgeable legal professionals who are licensed to operate in their state or jurisdiction of residence. Experienced asset protection attorneys offer a wide variety of different services, many of which are similar to those offered by other specialists.
Still, their focus on asset protection law and case precedent makes them unparalleled advisors when it comes to defending your wealth from creditors, lawsuit plaintiffs, ex-spouses, and anyone in between.
Provides Legal Counsel
An asset protection attorney, for example, can provide sound legal counsel to you and others involved in the trust. Don’t discount this major benefit.
Trusts are complex instruments, even if you set up a seemingly simple vehicle for your funds. You may not know things like:
- What type of trust you should create
- Where you should place the trust
- Who should be the trustee
- Who should be a beneficiary of the trust
- What kinds of dividends or distributions you should expect
- And more
Furthermore, things can be very complex depending on your jurisdiction and the future jurisdiction of your trust vehicle. You might have lots of questions about tax laws, whether your assets will truly be safe if you set up your trust in one jurisdiction versus another jurisdiction, and so on.
The right legal counsel will ensure you have accurate answers to these questions, and can therefore develop a solid asset protection strategy that serves you well for a long time to come.
Think of it this way; you would never approach a personal injury attorney if they couldn’t advise you on your court strategy. Similarly, you should expect a good asset protection attorney to give you stellar advice about your asset protection plans!
Does Trust Due Diligence/Research
As we touched on earlier, setting up a good asset protection trust requires a lot of research. At a bare minimum, you need to know which jurisdiction in which you should set up the trust and which bank you should use for the trust itself.
Even if you operate in an industry parallel to trust setup, you'll likely have no idea where to start learning this information. The knowledgeable experts at Dominion, for example, already know what to research, who to contact, and more.
You can rest assured of their due diligence and research to turn up the best answers for your trust needs. Any good trust worth your time and money will take some weeks to set up at minimum; a lot of the time will be spent researching the ideal location and bank for your goals.
Helps Draft Trust Paperwork
Your trust is only as strong as the legal terminology used in its creation. So a good asset protection attorney will draft trust paperwork that is legally airtight.
It won’t include any loopholes, exploits, or misplaced commas that could compromise your asset protection efforts. Generally, a capable asset protection attorney has several knowledgeable, experienced individuals to look over the paperwork and make sure it is ready to go before having you or anyone else sign any dotted lines.
Manages Trusts
Creating your asset protection trust is just the start. You’ll also need to make sure its management is set up properly.
Good asset protection attorneys oftentimes handle the management of your trust as trustees. That’s one of the services we offer at Dominion. You’ll want your asset protection trust to be managed by someone who:
- Knows how to rebuff legal attacks and creditor claims without folding under pressure
- Can carry out your trust management and administration orders to the letter
- Can help you decide how you want the trust to be managed if you don’t know where to start or you are unsure of how to take full advantage of the assets within the trust
- Will work with you if the needs of your trust or estate change in the future
The trustee is the most important individual in a trust setup. Thus, choosing the right trustee is paramount. If you choose the wrong trustee, you may not follow your orders, might distribute assets poorly or incorrectly, and may not defend your assets against legal attacks as capably as they should.
Represents Clients in Court/Legal Proceedings
Like other specialized attorneys, asset protection attorneys can also represent you and other clients in court or throughout other legal proceedings. You should never go to court, arbitration, or any other meeting with a legal opponent without a knowledgeable attorney at your side.
Attorneys know what to say, how to say it, and how to coach you to say the right things so you don’t damage your case. This benefit is truly invaluable if you need to fight back against claims to your wealth. You’ll have a much better chance of protecting your estate and property if you work with an attorney who can represent your side effectively and discount the accusations of your opponent(s).
Why You Need an Asset Protection Attorney
You might have something of a legal background yourself, or you might simply be used to handling everything alone (especially if you’re an entrepreneur who successfully bootstrapped their way to riches).
But even if you have confidence and intelligence, you’ll still need an asset protection attorney to both devise and maintain a stellar asset protection strategy.
Trusts Can Only Be Created by an Attorney
Firstly, any trust instrument can only be created by a licensed attorney. You can’t draw up a trust yourself, no matter how confident you feel or how much you know about the subject!
You should specifically work with an asset protection attorney instead of an attorney specialized in some other discipline. After all, you wouldn’t go to a standard auto repair shop to have your luxury Lamborghini or other sports car fixed up, right?
Not at all! You need specialists who know exactly what to do and how to maximize the effectiveness of your trust. Work with knowledgeable, reputable asset protection attorneys, and they will help you create the ideal trust for your unique needs in no time.
Identifying the Ideal Jurisdiction for a Trust is Difficult
In addition, you’ll need to work with an asset protection attorney because it can be tougher than you think to identify the best jurisdiction for your trust.
Sure, you’ve probably been exposed to the same rumors or movie tropes that say the Cayman Islands or the Cook Islands are the flat-out best jurisdictions for asset protection. Unfortunately, that’s not exactly the case.
Not only is each person’s ideal jurisdiction different, but those jurisdictions in particular aren’t the best for asset protection, despite their reputations. A good asset protection attorney will explain this to you and help you set up your trust in a far better jurisdiction with less scrutiny and fewer loopholes for creditors and courts to exploit.
One-Size-Fits-All Strategies Never Work
On top of the above elements, remember that the strategy that worked for your peer, business partner, or family member may not necessarily work for you.
In fact, asset protection strategies are each unique; you need a plan specialized for your circumstances, your jurisdiction, and the wealth you want to protect.
An asset protection attorney will know how to craft a unique strategy and plan that will achieve your goals and keep your wealth protected for years to come.
You should never rely on a templated or "standardized" asset protection plan and trust setup – that's a fast way to end up disappointed when a creditor compromises your trust and gets access to your assets even after all your effort.
You Need to Trust Your Trustee
Another big reason you should work with asset protection attorneys is that you must absolutely trust your trustee. When you set up an irrevocable trust, your trustee has ultimate power over the trust and the assets contained within.
If your trustee doesn't work out for whatever reason – maybe they misinterpret your goals or the language in the trust document, or maybe they don't defend your assets as aggressively as they should – your entire asset protection strategy could fall to pieces.
You wouldn’t place a mediocre project manager at the head of the most important project at your company. Similarly, you should rely on an asset protection attorney to help recommend the perfect project manager for this most critical wealth preservation and protection project.
Asset protection attorneys often have the right contacts to help connect you with the perfect trustee. Or they may operate as your trustee themselves. That’s how we handle things at Dominion. Everything is in-house – when we set up a trust, one of our trust attorneys will captain your ship for as long as it’s needed.
Your Protection Goals/Needs May Evolve
Lastly, the exact needs or goals for your asset protection strategy might evolve over time. What if, for example, you start off with short to mid-term wealth protection and eventually want to pivot and evolve your strategy to incorporate big distributions to beneficiaries in the decades to come?
Changing your trust – especially an irrevocable trust – is best handled with an attorney to walk you through the necessary steps. They can recommend a different strategy, or, even better, they may help you draft your irrevocable trust so that it allows for distributions and other long-term goals from the outset.
Just like it’s important not to set up an asset protection trust by yourself at first, it’s crucial to never drastically change your strategy without an attorney pointing out potential pitfalls and providing sound counsel.
Contact Dominion Today
Ultimately, Dominion employs the asset protection attorneys, financial experts, and other advisors you need to not just create but maintain a comprehensive and effective asset protection plan for years to come. Our firm’s members have a collective 100 years of experience between them, and we’ve protected hundreds of millions of dollars in assets and liquid capital for our clients in the past.
We're certain we can provide the same services and the same quality to you. Contact us today, and we'll begin with an initial consultation to determine your needs and the ideal asset protection plan for those goals.
