Don’t you have a moral and ethical obligation to pay your debts? This is a question raised all the time by reasonable people like you and me. We have been schooled in the idea that that is what honorable people do. But are there any circumstances in which we might feel that asset protection planning might be justified?
What many of us either don’t know or ignore is that the U.S. justice system can be completely fickle. Today’s professional are too often faced with the possibility of having to spend their time and money to defend a frivolous lawsuit just because they appear to have “deep pockets.” Sometimes judgments are awarded only to have them later overturned because the decision by the lower court failed to meet the legal threshold necessary to prove the case. Then there is perhaps the biggest problem anyone acting in today’s marketplace faces and that is ever-expanding theories of liability.
As the cost for malpractice insurance for all sorts of ‘risky’ professions skyrocket, attorneys who engage in asset protection planning help their clients preserve and protect their property in advance of a claim or the threat of a claim. Where is the incentive, for example, for a physician to study for years then work the long hours the profession requires if one unfortunate medical result could mean the loss of years of income? I’m not talking about the cases of obvious malpractice, rather those situations in which the doctor has performed flawlessly, tried every possible course of treatment only to have a result that is less than what was hoped for. In cases such as these, the goals of asset protection planning is to bullet-proof the professional by providing incentives to settle the claim or deter the litigation in the first place.
What asset protection planning is not and never should be about is a method of avoiding taxes, keeping secrets, hiding assets, or defrauding creditors. Nor will asset protection planning ever be effective after a lawsuit has been filed or threatened.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning. However, proper estate planning is not a do-it-yourself project. Why not call us for a complimentary consultation at 757-259-0707.