June 14, 2005

By John Dietz
Senior Advisor

Thank you for your generous feedback from our first newsletter and web site. The first newsletter went out two weeks ago, and we have heard from an almost overwhelming number people across the country all in search of the right people and tools to protect their assets. If you did not receive a copy, please send us an email requesting one at sales@trustmakers.com. In the meantime, you may want to check your spam filter and put sales@trustmakers.com on your good list because you do not want to miss any updates about the ongoing changes in the world of asset protection.

My good friend in the investment world always says "if you can't understand it in ten minutes or less, it's not for you." I think he has a good point. So we at Trustmakers are constantly working on breaking down the legal jargon into conversational English so that you can get it at first glance. We take great concern for this, so if you have any questions about topics in the former newsletter, please send us an email asking for explanation.

Enough said; let's get down to business. I was recently with some folks in the medical profession speaking about asset protection. As always, some very complicated subjects were discussed. It seems everyone wants to save taxes and set up a good estate plan, but what always gets me is that the basics of asset protection seem to slip from thought. After discussing Swiss annuities, Captive insurance companies, new bankruptcy laws and the like-by the way, none of these topics were on the list to be discussed-one well known individual popped up and said "look, if I get into trouble I will just turn over my asset to my wife." This kind of strategy won't provide protection from lawsuits at all. In fact, if it isn't done properly, it could wind up becoming the basis for fraud.

This is a common misconception, especially in the medical community, that placing assets in the spouse's name is an effective asset protection strategy. It's estimated that close to 30 percent of the nation's medical doctors have engaged in this practice.

The fact is that lawyers often give this advice without understanding its implications. The Uniform Fraudulent Transfers Act and the Uniform Fraudulent Conveyances Act state that courts can consider family relationships in lawsuit proceedings. These statutes further state that "transferring family assets to immediate family members is fraudulent if it is done in a reaction to a lawsuit." Even if the transfer is prior to a lawsuit being initiated, the courts may still find the arrangement as an implicit attempt to defraud creditors.

Therefore, professionals who could be at risk of losing their homes in medical or dental malpractice lawsuits are strongly advised to consider alternative forms of titling their assets, including single-member Limited Liability Companies (LLC's) and Family Limited Partnerships (FLPs). We have a page setup for our subscribers that will expedite the formation of an LLC - get started now by CLICKING HERE.

If any of you out there need addition information about this subject, please call or email us. Until then, thanks again for you continued support.

For now
Good day to you.
John Dietz

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.