There’s always a new “landmark” case that’s blown out of proportion, the Alaska case Battley v. Mortensen merely supports existing U.S. law on the 10 year look-back in bankruptcy, if it surprised your Asset Protection planner you need better help, it’s been on the books for years.
As for Banruptcy protection in general I tell my clients that if there is any as a result of the planning we do, it’s incidental.
There are three things I warn all clients about Asset Protection planning not being effective against:
– Divorce from our EXISTING spouse that already has marital property rights vested;
We need to examine the rulings in all of these cases for general rules and guidelines that will be used against clients in the future but some basics remain;
1. Domestic APTs fail simple challenges like full faith and credit. We don’t use them because we can’t trust the very subjective results of the U.S. legal system to do what’s right or fair;
2. The best systems have LAYERS that are implemented with legitimate business purpose and usage appropriate for the client and specific asset being protected;
3. The APT is the last line of defense, not the first;
4. We don’t protect criminals and people who commit fraud and the cases that armchair quarterbacks love (i.e. Anderson, Lawrence, Thomas) all share certain similarities;
5. TIMING IS KING;
6. Proper formalities, foundations and maintenance are vital to success;
7. You can’t do this at home, with an amateur or using a kit, even if you are really, really smart;
8. There is no such thing as a guarantee in the law, any lawyer who makes such a promise is an IDIOT or LIAR – all we can do is follow best practices and look at what has worked historically in actual practice at the street level.