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Myth: Asset Protection is ONLY for those with very high net worth.

FALSE: It’s extremely simple: a client with a net worth of $5 million won’t be nearly as affected by a $1 million lawsuit judgment compared to a client with $1 million net worth. The client with the net worth of $5 million can pay the judgment and continue to live the life that he or she is accustomed to. Conversely, a client with $1 million in net worth who gets a $1 million judgment is literally bankrupt and the life of his or her family will change drastically.
When Lodmell & Lodmell starting providing asset protection services in 1997, our main focus was those individuals with over $250,000 in net worth. At this level, our clients still fall into the category of the wealthiest 1 percent of Americans, yet they have the most to lose if they find themselves in a lawsuit.

Myth: On-shore planning is as strong as offshore planning.

FALSE: Many planners and states claim its Family Limited Partnership (FLP) or newly devised domestic asset protection trusts, based in the United States in states such as Delaware or Nevada (on-shore planning) provide complete asset protection. While these on-shore plans are effective to a certain level, they are not bulletproof. The safest asset protection includes planning that is not subject to U.S. courts.

Myth: I will lose control of my money with asset protection.

FALSE: With proper legal asset protection planning, you do not lose the control of your money. While the legal tools and planning may seem confusing at first, the net effect of a good plan will always leave the client in the position of enjoying their assets.

Myth: The IRS will audit me if I implement asset protection.

FALSE: Setting up asset protection planning through a qualified attorney will not make you more susceptible to an IRS audit. In fact, there are additional forms you may be required to file with your asset protection tools will actually help the IRS recognize that you have the protection properly and legally put in place.

Myth: Asset protection can save me taxes.

FALSE: Asset protection should not be considered as a tax saving plan. If an Asset Protection Planner promises they will save you taxes, BE VERY CAREFUL before you engage their services. Tax planning and asset protection rarely, if ever, go together. Unlike tax neutral asset protection plans, like ours, those that attempt to get a tax benefit may draw future IRS scrutiny.

Myth: I am not a lawsuit target.

FALSE: Lawsuits are the United States’ new favorite pastime. In fact, it’s statistically easier to win a multi-million dollar lawsuit than it is to win the lottery. With more than one lawyer for every 292 U.S. residents, the number of lawsuits filed everyday will continue to rise. No one is safe from litigation-especially if his or her net worth is over $250,000. At this level of net worth, you are wealthier than 99 percent of U.S. residents and your high net worth is susceptible to frivolous lawsuits.

Myth: Asset protection is illegal.

FALSE: If properly implemented by a qualified attorney, asset protection is a powerful legal tool that can protect clients from future litigation judgments. In fact, The Wall Street Journal, regularly reports on the legal benefits of asset protection. To the extent that you do not seek to defraud your present known creditors, there is nothing illegal or immoral in placing some of your assets beyond easy reach of predators. In fact, far from being considered something illegal or immoral only done in shady offshore jurisdictions, asset protection laws have now been adopted in 16 U.S. States. Asset Protection is here to stay.

Myth: I am fully protected with “just” a Family Limited Partnership or Corporation.

FALSE: Many asset protection groups claim that a Family Limited Partnership (FLP) is all that is needed to properly protect your assets. However, as mentioned above, this is onshore planning and your wealth is still governed by United States jurisdiction. Many companies tout FLPs or “Nevada Corporations” as being successful asset protection for the simple fact that they do not have access to offshore planning, or do not have the expertise to complete a full offshore plan for you. Rather than advising you on the best plan, they may be selling only what they already have “on the shelf.”

Myth: I must keep active foreign bank accounts at all times.

FALSE: A foreign bank account is not required unless you actually need to move assets offshore. In most cases, the massive deterrent factor of having the appropriate offshore planning in place is enough to dissuade anyone advancing a frivolous or merit less lawsuit.

Myth: If triggered, I must flee the country.

FALSE: In the rare event that asset protection planning is triggered to an offshore account, only the ownership of the money leaves the country, and the individual does not need to leave the United States. There is no illegal action taking place that would require the client to follow his or her money.

Myth: Asset protection can be implemented after I am being sued.

FALSE: The BEST asset protection is set up BEFORE any threat or serving of a lawsuit. If you have been served with lawsuit papers, or believe that a lawsuit is imminent,your planning may be compromised. However, every circumstance is very individual and in some cases even after the fact some planning can be done. The determination of what requires very specific analysis and you should contact an an experienced attorney if you find yourself in this situation.

Myth: I can protect myself by transferring all my assets to spouse and/or children.

FALSE: Transferring all of your assets to your spouse and/or children will not protect you from frivolous lawsuits. Transferring your assets to your spouse and/or children opens up another Pandora’s Box. Not only does it open up your assets to the liabilities of your spouse or children, but it creates issues and problems for Estate Planning, or in the event of an asset division such as a divorce. Not to mention that it likely will just not work. The courts can use the doctrine of a “Constructive Trust” to simply pierce the veil and consider your family member as simply holding those assets in trust for you.

Pashmina Lalchandani

CEO & Co-Founder, Bar & Cocoa / Owner, Flow Simple
December 9, 2010, Douglass was a client of Pashmina’s

I’ve known Doug in many contexts, as a friend, as a client and as a business partner and he impresses me on all levels. He’s dependable, smart, generous and I wouldn’t hesitate recommending him and his law firm to anyone.
He’s the best and most ethical lawyers providing asset protection with rock solid strategies to give you peace of mind about your wealth. Straight forward, and straight talk. Doug is exactly the lawyer I want on my side. If I send someone to Doug, I know they’ll thank me for it!

Social & Solar Entrepreneur, Pan Afrikan Theorist, Translator/Interpreter,
Founder & Visionary Leader @ Afrikanpride.
March 12, 2011, Marlon E. D. J. worked with Douglass but at different companies

Doug is one of the most powerful thinker i have came across. During the short time that i have known Doug he has been a great source of inspiration. He has a simplistic yet effective and accurate way to analyze anything you bring to his attention, and then by asking you key questions he gets you to see the light at the end of the tunnel. Besides being extremely bright, he is a genuine and caring individual which is why I feel fortunate to know him. I can say without a doubt that he his the person you would want to talk to if you were in need of a person with his expertise.
Most of the lawyers out there will probably meet your needs, but if you are looking for someone to exceed your expectations and give you that wow factor, look no more he is the person for the job.

Patricia Salter

Associate Dentist at Smileology
December 1, 2010, Patricia was a client of Douglass’

I have been a client of Douglas Lodmell’s since 2001. My main concern was asset protection in this litigious society. I can sleep alot better at night knowing I have the instruments in place to protect the fruits of my labor, and that they will not end up in the hands of a slick trial attorney.

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