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#219 - 06/08/04 04:01 PM Re: Asset Protection Group
JimRyan Offline
New Member

Registered: 06/01/04
Posts: 10
Loc: Columbus, OH
Your responses seem reasonable but are not totally convincing. Reed may have failed in the specific asset protection situation you refer to, but do you know the entire story of his personal asset protection experiences? You seem to resent the idea of non-lawyers providing asset protection services. You refer to it as "the unlicensed practice of law." Where is it written that asset protection is the exclusive territory of attorneys. Reed forms corporations (no law license required for that service) and advises clients how to use them to establish financial privacy (a consulting service not a legal service). No legal documents such as trusts or partnership agreements are provided. No representation of clients is provided and no legal advice is given. So where is the practice of law taking place? You may not like or agree with his methods but I don't think you can rightfully accuse him or his consultants of doing anything illegal. If that were the case it seems they would have been stopped a long time ago. Some people, including many attorneys, believe all asset protection methods are unethical, including the solutions provided by attorneys. How is setting up an FLP (LLC) or an offshore trust more ethical than using corporations to shield assets? Seems to me that all these methods are designed to frustrate or defeat the efforts of potential creditors.
_________________________
James J. Ryan, jr.
Consultant
614.799.2469 (ph)
614.799.2989 (fax0
614.738.8751 (cell)
jimryan@pobox.com

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#220 - 06/08/04 04:47 PM Re: Asset Protection Group
jambur64 Offline
Member

Registered: 06/09/02
Posts: 140
I say, give APG your $10,000 and as you provide them client's they'll return it to you as your reward (not a good business proposal). If you end up making more money than your intial $10,000 then good luck until one of the people you set up gets in trouble.

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#221 - 06/08/04 07:06 PM Re: Asset Protection Group
JimRyan Offline
New Member

Registered: 06/01/04
Posts: 10
Loc: Columbus, OH
Actually, the gradual return of the $10,000 is not the consultant's primary source of revenue. That's just a little added bonus as consultants bring in new clients. The primary revenue source is the difference between the fees paid by clients and the consultant's fees (wholesale price) paid to APG. A consultant can recover his entire $10,000 just by bringing in a handful of new clients. However, having clarified this issue, you still very well may be correct in suggesting that it's not a good business proposition to become an APG consultant. But the primary reason for this, I believe, would be the small size of the market and the consultants' lack of solid credentials with which to approach the market. Also, if sold properly and to appropriate prospects (those with no pending or threatened lawsuits), I believe the APG service is an effective method of asset protection. Of course it's true that the protection could be defeated if the client is brought to a debtor's exam under oath, i.e. forced to acknowledge the existence of protected assets and to repatriate them. But in the vast majority of cases, it will never get that far. Frivolous suits will not proceed without easy identification of seizeable assets. Less frivolous lawsuits might proceed but settlements in favor of the client are more likely without visible assets to seize. And in fairness, FLP's are not impregnable either. The assets are in full view to potential plaintiffs and their attorneys. And there is a growing body of precedent for courts to not limit a successful plaintiff's remedy to just a Charging Order. Probably the only truly Bulletproof asset protection method is a properly constructed and properly administered offshore trust. And that's great for those wealthy enough to spend up to $50,000 to set one up and thousands per year to maintain it. Finally, it's no surprise that the highly regarded estate planning attorneys mentioned would not recommend Reed. He's their competitor and offers a much more affordable alternative. Thanks for listening.
_________________________
James J. Ryan, jr.
Consultant
614.799.2469 (ph)
614.799.2989 (fax0
614.738.8751 (cell)
jimryan@pobox.com

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#222 - 06/08/04 08:53 PM Re: Asset Protection Group
Bill Smith Offline
Member

Registered: 12/31/03
Posts: 168
Loc: Uzbekistan
"Your responses seem reasonable but are not totally convincing."

To one who isn't looking at this objectively but has already bought into Reed's B.S.

"Reed may have failed in the specific asset protection situation you refer to, but do you know the entire story of his personal asset protection experiences?"

If his junk didn't work for him and even got him suspended, why should one suspect that it will work for somebody else?

"You seem to resent the idea of non-lawyers providing asset protection services. You refer to it as 'the unlicensed practice of law.' Where is it written that asset protection is the exclusive territory of attorneys."

Better ask the state attorney general's office that question, or Jay Mitton who was run out of Florida because he didn't have a Florida license (but, unlike Reed, he did have an active license, but in Utah).

"Reed forms corporations (no law license required for that service) and advises clients how to use them to establish financial privacy (a consulting service not a legal service). No legal documents such as trusts or partnership agreements are provided. No representation of clients is provided and no legal advice is given."

Then why would anybody use his services? If all they get is the naked entity, then they should just use http://incorporate.com

"So where is the practice of law taking place? You may not like or agree with his methods but I don't think you can rightfully accuse him or his consultants of doing anything illegal."

I'll let the state attorney general's decide that.

"If that were the case it seems they would have been stopped a long time ago. Some people, including many attorneys, believe all asset protection methods are unethical, including the solutions provided by attorneys. How is setting up an FLP (LLC) or an offshore trust more ethical than using corporations to shield assets? Seems to me that all these methods are designed to frustrate or defeat the efforts of potential creditors."

That why you need to be an attorney: To know the difference. Exhibit #1 why one not educated in the law cannot practice asset protection.

"Actually, the gradual return of the $10,000 is not the consultant's primary source of revenue. That's just a little added bonus as consultants bring in new clients. The primary revenue source is the difference between the fees paid by clients and the consultant's fees (wholesale price) paid to APG."

Why would the client pay any more than the minimal amount to form the corporation if that is all he is getting? Want a Nevada corporation? They are just a few hundred bucks online at http://incorporate.com

"A consultant can recover his entire $10,000 just by bringing in a handful of new clients."

How, by misleading them into paying an exorbitant sum for a Nevada corporation that anybody can form online for a couple of hundred bucks? How is this different that the network marketing companies that sell junk for 20x the street cost? It isn't.

"However, having clarified this issue, you still very well may be correct in suggesting that it's not a good business proposition to become an APG consultant. But the primary reason for this, I believe, would be the small size of the market and the consultants' lack of solid credentials with which to approach the market."

In addition to spending money to avoid prosecution for the unauthorized practice of law, and to avoid client lawsuits because the planner didn't comprehend the tax ramifications of the planning.

"Also, if sold properly and to appropriate prospects (those with no pending or threatened lawsuits), I believe the APG service is an effective method of asset protection."

Based on what? You've already admitted above that you don't know why asset protection in general isn't all a fraudulent transfer. Do you even realize that the fraudulent transfer laws can applies to creditors who arise after the planning as well as before it?

"Of course it's true that the protection could be defeated if the client is brought to a debtor's exam under oath, i.e. forced to acknowledge the existence of protected assets and to repatriate them."

In other words, it doesn't work.

"But in the vast majority of cases, it will never get that far. Frivolous suits will not proceed without easy identification of seizeable assets."

And what is this assertion based on? Most plaintiff's lawyers will "file first and ask questions later", since the filing costs are minimal (usually less than $200 in most states and in federal court).

"Less frivolous lawsuits might proceed but settlements in favor of the client are more likely without visible assets to seize. And in fairness, FLP's are not impregnable either."

Their record is excellent: After dozens of challenges there have been only a few cases where properly-structured limited partnerships have been invaded by creditors. Nothing is perfect, but it is insane to compare Reed's "will fail if they figure it out" planning with limited partnership planning that stands up more than 95% of the time.

"The assets are in full view to potential plaintiffs and their attorneys. And there is a growing body of precedent for courts to not limit a successful plaintiff's remedy to just a Charging Order."

So what? The creditor then just gets the limited interest itself, which is useless if the limited partnership agreement has been properly drafted.

"Finally, it's no surprise that the highly regarded estate planning attorneys mentioned would not recommend Reed. He's their competitor and offers a much more affordable alternative."

I doubt that any of the top planners think of Reed as a "competitor" as much as a carnival huckster selling his bearer-shares snake oil to the masses. The top planners want sophisticated businessmen for clients, and not rubes.
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#223 - 06/08/04 09:22 PM Re: Asset Protection Group
JimRyan Offline
New Member

Registered: 06/01/04
Posts: 10
Loc: Columbus, OH
You should tell me how you really feel about Reed (just joking). I think we'll have to agree to disagree. But I still say no one in Reed's program is trying to practice law without a license. Don't know who Jay Mitton is but it sounds like he was actually trying to practice law , as a lawyer, but withoiut a Florida license. That is a no-no. But I don't think marketing asset protection services as a consultant is attempting to practice law. If it is, why haven't Reed and his consultants been shut down? Regarding the penetration of FLPs, ask the Enron crowd how well theirs held up. When I suggested they can be penetrated I didn't mean only to the extent of the limited distributions. I meant they can be set aside as nothng more than an attempt to defeat legitimate creditors' claims. OK, maybe they are 95% successful. I wouldn't want to be in the other 5% group. What do you think the success rate is for Reed's clients? Do you have any statistics on that? I'll accept your suggestion that I lack expert knowledge of asset protection legal issues. But your attack against Reed's program reveals that you don't understand it either. He readily acknowledges that just forming a corporation is no big deal and not worth more than a few hundred bucks. The value he provides is the expertise in using these asset protection corporations - which is extensive and the strategies do work. Finally, do you know of any of Reed's clients that have gotten into trouble using his program? If so, what are the specifics. Thanks.
_________________________
James J. Ryan, jr.
Consultant
614.799.2469 (ph)
614.799.2989 (fax0
614.738.8751 (cell)
jimryan@pobox.com

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#224 - 06/08/04 10:10 PM Re: Asset Protection Group
Bill Smith Offline
Member

Registered: 12/31/03
Posts: 168
Loc: Uzbekistan
Suffice it to say that I have substantial doubts about Reed's claims. What was the date of the first franchise that he sold, i.e., the first date that he annointed somebody else as one of his "consultants"?
_________________________
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#225 - 06/09/04 12:50 AM Re: Asset Protection Group
JimRyan Offline
New Member

Registered: 06/01/04
Posts: 10
Loc: Columbus, OH
I understand your skepticism. I don't know exactly when he signed up his first consultant but it was probably about three to four years ago. Before that he was marketing his program himself. He aligned himself with a guy named Rick Neiswonger, a marketing guru, who took him nationwide. They sign up about 15 or 20 new consultants a month. Most of them fail, not because their product is flawed, but because asset protection is a complex field, replete with legal and tax issues, and not everyone can adequately explain it or gain credibility in it. Maybe that supports your position that only lawyers should be engaged in it (although I don't agree with that). Therein lies the primary problem. It's not the clients that get taken. It's the consultants that sign up and then can't sell it. But I think a sophisticated, astute person can actually make a living at it, without doing anything illegal. Not sure how many people fit that profile. I enjoyed our discourse though and appreciate your input. Best Regards,

Jim Ryan
_________________________
James J. Ryan, jr.
Consultant
614.799.2469 (ph)
614.799.2989 (fax0
614.738.8751 (cell)
jimryan@pobox.com

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#226 - 06/11/04 02:30 AM Re: Asset Protection Group
jambur64 Offline
Member

Registered: 06/09/02
Posts: 140
If you don't think lawyers should be the ones who engage in estate crisis management, what type of privilege does the client get when working with one of these consultants? If under a court order they'll have to turn over all their records.

Who is going to regulate them so they don't cross the line and give false claims?

There really isn't such a thing as asset protection, it is only an extension of estate planning referred to as integrated global estate planning so this should be done by professionals trained in tax, estate planning, and have an understanding of civil procedure so that they can plan and anticipate the legal process a person will go through if they fall into the cross hairs of an opportunist.

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#227 - 06/15/04 06:43 PM Re: Asset Protection Group
JimRyan Offline
New Member

Registered: 06/01/04
Posts: 10
Loc: Columbus, OH
I didn't say thatlawyers shouldn't be engaged in asset protection. I just said there's no prohibition against others being engaged. Why would a client need the benefit of "privilege" if FLPs are completely out in the open? What is there that needs to be kept confidential? I'll admit that there might be some added safety (or at least perceived safety) for clients that use attorneys(competent ones), but there also will be added costs for this safety. And the question is "is that extra cost really necessary?" There are situations where an attorney is obviously required - litigation, criminal charges, complicated contracts, etc. But there are also situations where non-attorneys can be effective too. It's a free country. We can do whatever we want as long as we don't break the law. Any client that puts asset protection into place using a consultant will still require the services of an attorney if (s)he gets involved in litigation. And the client can confide in the attorney about the asset protection in place.
_________________________
James J. Ryan, jr.
Consultant
614.799.2469 (ph)
614.799.2989 (fax0
614.738.8751 (cell)
jimryan@pobox.com

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#228 - 06/16/04 05:17 AM Re: Asset Protection Group
Bill Smith Offline
Member

Registered: 12/31/03
Posts: 168
Loc: Uzbekistan
What is the value-added that the "consultant" brings to the table?

If it is advice, advice on what? Advice on Nevada corporate law (which the consultant has no education, experience or training to consult on)? Why isn't this advice legal advice and thus the unauthorized practice of law?

If the consultant isn't giving advice, then why doesn't the client just pay a few hundred bucks to http://incorporate.com?

Also, an attorney can do things which if a non-attorney did those same tasks would amount to civil conspiracy.

Next, what responsibility does the "consultant" have to advise the client about the tax consequences of the client's actions?

Reed's deal is a bad deal at any price. If you want to be an MLMer, go with a proven winner in Herbalife or something.
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