On Asset Protection Planning
This edition of the Family Office Association Newsletter features insights on asset protection planning by Daniel S. Rubin, J.D., LL.M
For as long as there has been a legal system, there have been two basic questions examined in the context of any civil litigation. The first question is one of liability; specifically, whether the defendant has done anything wrong. If the question of liability is answered in the affirmative, the second question, that of damages, is then asked; specifically, how much the defendant should have to pay to the plain in anttempt to make the plain whole. When these ques ons are asked and answered appropriately, the result is justice.
Sometimes, however, lawsuits originate and are prosecuted through motives anathema to the actual interests of justice. In such situations, the important questions are not whether the defendant has done anything wrong, or what harm has been occasioned by the defendant’s wrongful conduct. Instead, in such situations the sole question considered is whether a particular individual has the financial ability to pay over substantial sums of money. In fact, most attorneys in the plaintiffs’ bar consider finding such a “deep pocket defendant” to be the single most important consideration when deciding whether or not to commence a lawsuit.
This perversion of justice harms each and every citizen in some manner, big or small. Indeed, Warren E. Burger, the Chief Justice of the Supreme Court of the United States from 1969 to 1986, is often quoted as stating that: “…our society is drowning in litigation…look at the overworked system of justice, the delays in trials, the clogs businessmen face in commerce and a medical profession rendered overcautious for fear of malpractice suits.
The litigation explosion, which developed in barely more than a decade beginning in the 1970’s, has a ected us at all levels…”. Helpfully, however, the litigation explosion has led to the development in recent years of an area of law designed to counter its e ect. This body of law, generally termed “asset protection planning,” involves the application of advance planning, and increasingly sophisticated techniques, to protect against potential future creditor claims.
This paper is intended to develop, for the benefit of a readership consisting of persons who do not hold law or other similar advanced degrees, some of the techniques that individuals of means might commonly apply in connection with their asset protection planning.
View the Newsletter in full: Newsletter: On Asset Protection Planning