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    Asset Protection: The Checks and Balances of the International Asset Protection Trust - Lodmell & Lodmell

    Carol
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    Post  Carol on Sat Apr 26, 2014 3:46 pm

    Asset Protection: The Checks and Balances of the International Asset Protection Trust - Lodmell & Lodmell

    "The Checks and Balances 
of the 
International Asset Protection Trust"

    By Douglass S. Lodmell, J.D., LL.M. 
Co-founder and Managing Partner, Lodmell & Lodmell, P.C.

    Since Asset Protection ultimately relies on removing the assets from both the U.S. jurisdiction and the control of the clients, a very good question is: How can I be sure that the new foreign Trustee doesn't run away with my money should I ever need to use the Trust? To answer this question, we need to look at the intricacies of how a well-drafted Asset Protection Trust creates internal and external "checks and balances."

    To begin, let's look at how the plan controls the money through:

    A legal structure which requires the approval and consent of various parties who act as checks and balances on the assets.
    A physical tracking mechanism set up directly with the independent client's chosen bank, which holds the money, so that the client is always aware of the money's location.

    The Asset Protection Trust has 4 primary roles:

    The Settlors (the clients).
    The Trustee.
    The Protector.
    The Beneficiaries.

    The legal control of the assets is done through a two-party approval mechanism. This is kind of like requiring two signatures on a check. The Trustee is responsible for the management of the assets and has legal title. However, unless the Trustee is the client, they do not have physical possession of the money, which is held at an independent and unrelated bank.
     
    In order for the Trustee to actually do anything with the money, they then must also have the consent of The Protector. This would include things like wiring the money to another bank or even to another account with a different name, or making any changes whatsoever in the physical location of the money.
     
    The role of Protector is just that, to protect the assets of the Trust for the benefit of the Beneficiaries. As such the Protector has two primary jobs:
     
    To approve of the actions of the Trustee.
    To remove the Trustee if the Trustee is not acting in the best interests of the Beneficiaries.

    This is what ensures that the Trustee doesn't run off with the money. The next logical question is: So who keeps an eye on the Protector? This is where the loop closes back to the only location in which the clients can have 100% security themselves. The Settlors (clients) have the power to remove and replace the Protector for any reason they choose to at any time. The only exception is if a U.S. court is demanding that they do so to appoint the court or a court representative as Protector, in which case that particular order is ignored.

    The only other possible loophole that could endanger the money is if both the Trustee and the Protector conspired together to defraud the Trust. This is highly unlikely in and of itself due to the fact that the Trustee is a large Trust Company and has their own internal checks and balances as well as the fiduciary duty and liability to the Trust, and the fact that the Protector is personally chosen directly by the client and has the same fiduciary duty. Nevertheless, the plan has one final check that ensures that the client themselves always have full knowledge of where the money is, and where it is going to.

    This final check is called a 'client acknowledgment' procedure. The bank, typically a large private Swiss bank, chosen by the client, will have a hold period prior to the execution of any orders to withdraw funds, or move money from the Trust account. This procedure would require the bank to have a personal confirmation that the Beneficiaries (also the clients) have direct knowledge of the proposed transfer.

    The Beneficiaries are not in "control" of the money directly. However, since the bank must have a direct personal verification that the Beneficiaries are aware of the transfer, if a proposed transfer is not approved, the bank will be so informed, by the clients themselves. The order would then be delayed for a sufficient period of time for the Settlors to appoint a new Protector, who will appoint a new Trustee.

    As you might imagine, the net effect is that it is virtually impossible to make any move with Trust assets without the client's direct knowledge and consent. This combined with the fact that any serious Asset Protection Plan is going to use only the most stable and reputable institutions to fill any fiduciary role makes having your assets offshore safer than the local bank down the street by far.

    The difference is that the bank down the street is in the jurisdiction of the court at the other end of the street. And right in the middle is the all-too familiar lawyers office, which is where all the trouble began in the first place.
    Douglass S. Lodmell, J.D., LL.M.

    Lodmell & Lodmell, P.C. 1631 E. Cheery Lynn Phoenix, Arizona 85016 United States (602) 230-2014

    https://www.youtube.com/watch?v=zIk5yfIt9QM&feature=player_embedded


    _________________
    What is life?
    It is the flash of a firefly in the night, the breath of a buffalo in the wintertime. It is the little shadow which runs across the grass and loses itself in the sunset.

    With deepest respect ~ Aloha & Mahalo, Carol
    Carol
    Carol
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    Posts : 24832
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    Asset Protection: The Checks and Balances of the International Asset Protection Trust - Lodmell & Lodmell Empty Re: Asset Protection: The Checks and Balances of the International Asset Protection Trust - Lodmell & Lodmell

    Post  Carol on Sat Apr 26, 2014 3:47 pm

    This is the Exact program ALL the wealthy use. Walton's, Kennedy;s Ect. There are 2 videos. This is a very simple concept. Been Looking for 3 Years. This is It.
    http://www.americansocietyap.org/presentation.php
    This where you go to purchase the kit. 
    http://assetfoundation.com/products/
    Attorneys to setup Trusts for Asset Protection

    Here is a valuable site to find attorneys to setup Trusts for asset protection. This is just a good start to search but everyone is responsible for interviewing your own attorney.

    http://www.actec.org

    The American College of Trust and Estate Counsel (ACTEC) is a nonprofit association of lawyers established in 1949. Its members are elected to the College by demonstrating the highest level of integrity, commitment to the profession, competence and experience as trust and estate counselors.

    All ACTEC members have made substantial contributions to the field of trusts and estates law through writing, teaching and bar leadership activities. The members work together in a collegial manner to

    • Enhance their ability to provide the most efficient and highest quality services to their clients;

    • Develop qualified trust and estate counselors;

    • Improve and reform probate, trust and tax laws, procedures, and standards of professional responsibility; and

    • Cooperate with bar associations and other organizations with similar missions.

    ACTEC members advise clients or teach in one or more of the following areas: planning for the orderly and tax efficient transfer of wealth during life and after death and preparing all related estate planning documents; administering trusts, decedent's estates, guardianships, conservatorships and other family entities; planning for incapacity and elder concerns; planning for employee benefits; Planning charitable gifts and advising exempt organizations; and handling tax controversy and fiduciary litigation.

    Membership in ACTEC is by election of the regents of the College. Individual lawyers meeting the criteria for membership are nominated for membership by fellows of the College, and subjected to careful review by both state and national membership selection committees, prior to consideration by the regents of the College. Applications for membership by members of the bar are not accepted by the College.


    _________________
    What is life?
    It is the flash of a firefly in the night, the breath of a buffalo in the wintertime. It is the little shadow which runs across the grass and loses itself in the sunset.

    With deepest respect ~ Aloha & Mahalo, Carol
    Carol
    Carol
    Admin
    Admin

    Posts : 24832
    Join date : 2010-04-07
    Location : Hawaii

    Asset Protection: The Checks and Balances of the International Asset Protection Trust - Lodmell & Lodmell Empty Re: Asset Protection: The Checks and Balances of the International Asset Protection Trust - Lodmell & Lodmell

    Post  Carol on Sat Apr 26, 2014 3:49 pm


    WHY YOU NEED ASSET PROTECTION
    Watch this video and think about it. 
    Ten Rules For Asset Protection Planning
    Ten Rules For Asset Protection Planning
    Jay Adkisson, Contributor  7/13/11

    Start early, keep it simple, and don’t try to hide stuff from your creditors.

    There’s a gambling saying that goes something like, “If you want to be a winner, you have to walk away from the table a winner.” One time-honored method of reaching this result is to systematically take your chips off the table as you win them, so that your potential for losses stays small.  Asset protection planning is all about taking chips off the table in good times, so that you still can walk away from the table a winner no matter what happens in bad times.

    Those who worry the most about asset protection are those who are the most likely to get sued; think obstetricians and, more recently, real estate investors here. But average folks often get caught up in difficult situations, and thus if you have something to protect then the topic of asset protection should at least cross your mind.Technically, asset protection planning is the debtor’s side of creditor-debtor law. While creditors are concerned about the strategies and techniques of collection, debtors are interested in the strategies and techniques for protecting their most valuable assets from potential creditors.

    But in this calculation, it is not just about protecting assets but also about making sure that one does not end up in jail for contempt or bankruptcy fraud for engaging in the process. 

    Keeping in mind the law school adage that “General rules are generally inapplicable”, the following 10 rules should always be kept in mind when you try to take your chips off the table.

    1. Start Planning Before A Claim Arises 
    Many things you can do will effectively provide asset protection before a claim or liability arises, but few things will afterwards. That’s because what you do after a claim rises could be undone by “fraudulent transfer” law.  Moreover, the point at which a claim arises is earlier than a layman might think—it is, for example, usually much earlier than when a demand letter or a process server shows up at the door. 

    2. Late Planning Usually Backfires 
    Asset protection planning after a claim arises is apt to make matters worse; think of it as getting a flu shot while you have the flu, and the shot itself making you even more woozy. It is a common misconception that the only thing a judge can do is to unwind a fraudulent transfer,  leaving a debtor who unsuccessfully tried late planning  no worse off than if he had done nothing. To the contrary, both the debtor and whoever assisted in the fraudulent transfer can become liable for the creditor’s attorney fees, and the debtor can lose the hope of getting a discharge in bankruptcy.

    3. Asset Protection Planning Is Not A Substitute For Insurance 
    Asset protection planning should not be a substitute for liability and professional insurance, but rather should supplement insurance. It is a myth that asset protection plans invariably scare away plaintiffs, and an asset protection plan doesn’t pay legal fees to defend against a lawsuit. Insurance also supplements asset protection planning, since it can help a debtor survive a claim a fraudulent transfer claim. If you get sued, let the insurance company pay to defend it and pay to settle it — that’s what you’re paying the premiums for. 

    4. Personal Assets Are For Trusts; Business Assets Are For Business Entities
    Business entities such as corporations, partnerships and LLCs are meant to be vehicles for commercial operations, not to act as personal piggybanks. When personal assets are placed into a business entity, the potential for the entity to be pierced by a creditor on some theory or another, such as alter ego, increases exponentially. The place to put personal assets is in a trust.  There is a long and solid body of law that protects trust assets—when the trust is properly drafted and funded. And please don’t name the entity the “Family” Partnership or LLC, unless your family is famous for making sausage or some such. 

    5. Too Much Control Is A Bad Thing 
    Asset protection planning attempts to reach a balance between giving the client sufficient control so that the assets do not disappear, but at the same time not so much control that a creditor can successfully argue that the debtor and the asset protection structure are effectively one-and-the-same and thus should be disregarded on alter ego or some similar theory.

    6. Asset Protection Planning And Tax & Estate Planning Don’t Always Jive
    Often asset protection planning and estate planning work together, but sometimes they are at odds and what might be a good idea for estate planning may not be such a hot idea for asset protection. For example, the making of gifts (to children and other prospective heirs)  is common in estate planning but anathema in asset protection planning since gifts are often easy to set aside as fraudulent transfers.

    Meanwhile, homestead exemptions are a very powerful asset protection planning tool, but this usually traps the value of the home in the debtor’s estate.

    7. Your Money May Be Offshore But You Are Here
    Recent cases have recognized the power of courts to require debtors to bring their money back to the U.S. through what are known as “repatriation orders”. If the debtor does not comply with a repatriation order, a court may issue a bench warrant for contempt of court and hold you in contempt (and in jail) until the money does come back, or for many years. The record? It is 14 years in jail served by former corporate lawyer H. Beatty Chadwick who refused to repatriate money from overseas to pay alimony to his ex-wife.

    8. Don’t Count On Bankruptcy As The Last Refuge Of A Desperate Debtor 
    Once upon a time, bankruptcy was akin to a nice warm shower that allowed a debtor to wash all debts away while still retaining a goodly amount of assets. Not anymore. In 2005, the bankruptcy laws changed to become a cold acid bath that leaves debtors with bare bones and little flesh. State homestead exemptions have been substantially limited, and other new provisions in the bankruptcy code and new bankruptcy case law can make parts of asset protection plans very difficult to protect in bankruptcy. Plus, bankruptcy judges have some of the strongest powers to make debtors cough up assets.

    9. If You Can’t Explain It, It Will Never Work 
    Many asset protection plans become so complicated that not even the client can explain how assets are held or how those assets were transferred. But such questions can be expected in depositions or a debtor’s examination, and a failure to fully and clearly explain what happened and why will make the court very suspicious and potentially give the court grounds to begin disregarding entities or setting aside transfers. Most judges start asking themselves, “What is really going on here?” If the structure and transfers are too complicated and not well explained, there is a much higher chance that the judge will find fraud on creditors. Indeed, the best asset protection plans are often simple plans, such as creating and funding an irrevocable trust for the benefit of their children. 

    10. Usually Everything Sees The Light Of Day
    Asset protection planning should be based on the presumption that the entirety of the planning and its purpose will eventually become known to creditors, because one way or another it usually does. Asset protection plans that require secrecy will face a plethora of problems, from how not to disclose the structure or activity on tax returns, to how to keep a mad ex-spouse or disgruntled employee from talking to creditors. And don’t even think about going into bankruptcy without making a full disclosure about assets and transfers. The failure to make a full disclosure will usually lead to a denial of discharge, and the failure to make a truthful disclosure can amount to charges of perjury and bankruptcy fraud.


    _________________
    What is life?
    It is the flash of a firefly in the night, the breath of a buffalo in the wintertime. It is the little shadow which runs across the grass and loses itself in the sunset.

    With deepest respect ~ Aloha & Mahalo, Carol
    Carol
    Carol
    Admin
    Admin

    Posts : 24832
    Join date : 2010-04-07
    Location : Hawaii

    Asset Protection: The Checks and Balances of the International Asset Protection Trust - Lodmell & Lodmell Empty Re: Asset Protection: The Checks and Balances of the International Asset Protection Trust - Lodmell & Lodmell

    Post  Carol on Sat Apr 26, 2014 3:51 pm

    Attorneys to set up Trusts for Asset Protection
    Here is a valuable site to find attorneys to setup Trusts for asset protection. This is just a good start to search but everyone is responsible for interviewing your own attorney.

    http://www.actec.org

    The American College of Trust and Estate Counsel (ACTEC) is a nonprofit association of lawyers established in 1949. Its members are elected to the College by demonstrating the highest level of integrity, commitment to the profession, competence and experience as trust and estate counselors.

    All ACTEC members have made substantial contributions to the field of trusts and estates law through writing, teaching and bar leadership activities. The members work together in a collegial manner to

    • Enhance their ability to provide the most efficient and highest quality services to their clients;

    • Develop qualified trust and estate counselors;

    • Improve and reform probate, trust and tax laws, procedures, and standards of professional responsibility; and

    • Cooperate with bar associations and other organizations with similar missions.

    ACTEC members advise clients or teach in one or more of the following areas: planning for the orderly and tax efficient transfer of wealth during life and after death and preparing all related estate planning documents; administering trusts, decedent's estates, guardianships, conservatorships and other family entities; planning for incapacity and elder concerns; planning for employee benefits; Planning charitable gifts and advising exempt organizations; and handling tax controversy and fiduciary litigation.

    Membership in ACTEC is by election of the regents of the College. Individual lawyers meeting the criteria for membership are nominated for membership by fellows of the College, and subjected to careful review by both state and national membership selection committees, prior to consideration by the regents of the College. Applications for membership by members of the bar are not accepted by the College.


    _________________
    What is life?
    It is the flash of a firefly in the night, the breath of a buffalo in the wintertime. It is the little shadow which runs across the grass and loses itself in the sunset.

    With deepest respect ~ Aloha & Mahalo, Carol

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