“If it’s worth striving for, it’s worth protecting.”

July 29, 2005
By Rob Lambert President, Asset Protection Corporation

Dear Subscriber:
To keep our high standards of providing you the best information about asset protection, I have decided to write a series of weekly newsletters dealing with the basics of Kinetic Asset Protection. Kinetic Asset Protection is best viewed as a continuing process of protecting your assets, and not so me fancy “plan” with bound and very expensive documents. Through this series of newsletters, my goal is for you to learn the basics and have a decent idea as to the steps that you might consider if asset protection ever beco me s necessary or appropriate for you. (Note, I think it is appropriate for everyone!) You will also learn of the best defensive techniques that you could implement provided that you have an “old and cold” plan in place when trouble comes.

For starters, this newsletter will highlight the basic rules for any offshore asset protection plan.All asset protection—domestic or foreign—is designed to make it difficult or impossible for any creditor to take your assets away from you. When you start dealing with Trusts, particularly offshore asset protection trusts, the techniques can beco me complex, but the rules are simple. Here are the FOUR basic rules:

1. WHAT YOU DON'T OWN CAN'T BE TAKEN FROM YOU: Seems simplistic and almost moronic…. But think about it. The act of funding a trust is basically the act of transferring your assets to a different (albeit artificial) person. If you give your “stuff” to someone, say the Red Cross, and years later a creditor of yours tries to take those donated assets from the Red Cross, the Red Cross is going to defend this by saying that they are not responsible for your debts. The reason is that the Red Cross is not you. It did not do the act which generated the “debt.” The moment you made the transfer, the assets do not belong to you. The Red Cross will prevail as long as the transfer to it was not a Fraudulent Conveyance. This is the same analogy if you would transfer the money to your asset protection trust. The assets held by this trust should not be reflected on your balance sheet as owned by you.

2. OLD AND COLD MATTERS: Remember, I said that the Red Cross will prevail as long as the transfer was not a Fraudulent Conveyance. One of the best ways to survive a Fraudulent Conveyance attack is to have what we call an “old and cold plan.” If the Plan was funded a long time ago when the financial seas were calm, it is very difficult for so me newly appearing creditor to get any judge or jury to believe that you funded your plan knowing that you would be disenfranchising by some future unanticipated creditor. I often tell my clients that implementing and funding a plan is just the first step in the asset protection process for this reason: it starts the stature of limitations running on any fraudulent conveyancing claim.

3. FOREIGN IS NOT “FOREIGN” IN ALL CASES: A properly structured plan implemented when the financial seas are calm does not require that protected assets be moved abroad or even put into the domination and control of a foreign trustee. Last weeks newsletter dealt with this in detail. Next weeks' newsletter will discuss “The Players,” and will go into further detail. It is just important to know at this stage that if the money is currently with the Bank of America, it can stay with the Bank of A me rica for so long as the financial seas are calm.

4. NO COUNTRY IN THE WORLD AUTOMATICALLY ENFORCES US JUDGMENTS: I have discussed this issue a lot. It is enough to say that this is a key rule. Remember: NO Country in the world cares about our laws,our juries and judges determined to redistribute your wealth into somebody else's pocket! We have 7 percent of the world's population, and 94 percent of the lawyers that has produced a judicial system that is considered laughable in most of the rest of the world. In short, other countries know that our courts do not dish out justice in many—sometimes most—cases and they do not trust our verdicts. Every country will force a retrial of the issues before enforcing a US Judgment. One of the nice things is that most of these countries don't permit contingent fee litigation, and they often force the person attacking you to post a bond to cover your legal fees if they lose.I look forward to continuing this series on Kinetic Asset Protection (aka: the process of asset protection planning). Next week, I will deal with understanding the players.I wish you a happy and protected week.Best

Rob Lambert

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.