Is Asset Protection Planning Immoral?

International Wealth & Asset Planning Blog Feb 19, 2019 Denver, CO

A question that is raised on occasion is whether it is legal, ethical and moral to protect your assets. Asset protection is clearly legal and ethical. As to morality, perhaps asset protection planning is immoral if this planning is being initiated for a person who is wanting to hide ill-gotten wealth from others with sinister goals to “get away” with wrongly depriving others of amounts belonging to them. But for the individual who is simply wanting to plan in advance to not unnecessarily leave assets available for the legal system to hand over to others beyond his control, this kind of planning is not only moral, but highly recommended to meet the duty you owe to not just yourself, but your family’s financial well-being.

If you think there is an inherent unfairness in protecting your assets, consider a case where you (assume you were 10% “at fault” in hindsight on some issue) and someone else (who was 90% at fault) are jointly named and lose in a lawsuit. If the other joint defendant has no assets (or they were protected), the legal system and plaintiff would likely have no qualms in collecting the entire judgement from you as the joint defendant with the available assets. Does that sound moral? At the very least, protect your assets, and then if you end up on the wrong side of a lawsuit and feel a moral obligation to pay the plaintiff, then the protective structure you created can still pay the plaintiff if it is not being coerced. With the protective plan in place, the administrator (e.g., trustee) of the protective structure (as opposed to the plaintiff/creditor) can determine whether this is a case where the plaintiff should be compensated, or in contrast a situation where you have been unfairly targeted. This can lead to a better result than a court being in total control of making the decision.

About Greenspoon Marder

Greenspoon Marder LLP is a full-service law firm with over 240 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has upheld a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.

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This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

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