Honesty in Asset Protection

Many people confuse asset protection with hiding assets.  At Lodmell & Lodmell, we help our clients develop asset protection strategies and put put asset protection mechanisms in place so that assets don’t need to be hidden.  What we do is help our clients create a legal vault for their assets.  The vault that we build is essentially impenetrable, so there is no need to hide it.

What Happens if You Lose in Court?

So what happens if you get sued by a shark–a plaintiff’s attorney that is relentless and actually wins a judgment against you?  Well, after a lawsuit is over, there is typically a post-judgment phase.  During the post-judgment phase, creditors (the people who won the suit against you) are permitted an opportunity to examine your financial records for non-exempt assets.  If you have a good asset protection attorney on your team, there is nothing to hide during the post-judgment phase!

In fact, lying about assets during this phase can get you into a lot of trouble.  If you are evasive, then you risk being viewed by the court as unreliable and untruthful.  In a worst case scenario, uncooperative judgment debtors can be held in contempt of court.  How much more difficult does it become to defend a totally legal, good faith, legitimate asset protection plan then?

Having Faith in Asset Protection Plans

With a good asset protection plan in place, you actually have other options open to you.  In other words, there is never a need to be evasive or lie.  With a solid plan in place, you can fully disclose your asset protection strategies prior to litigation.  In many cases, this alone serves to discourage and sometimes even eliminate lawsuits entirely.

Another option available is to take a default judgment.  That simply means that you decide to not defend yourself in court.  Allow a judgment to be entered against you, and then show the plaintiff’s attorney your asset protection plan in the post-judgment phase.  The point is that people who have taken the trouble to develop asset protection plans don’t need to lie.  In fact lying is counter-productive.  The best thing you can do is to be open and honest with your asset protection attorney as you plan, that way you never have to even think about lying in court.