Asset protection planning is not intended to be a game of silver bullets or invincible armor. Sadly, this doesn’t prevent certain salesmen from marketing asset protection in that way and certain debtors from buying into it.
A tale of gullibility, faked complexity, and predictable endings can be found in a recent Forbes article titled “Bill 'Bulletproof A$$et Protection' Reed's Complex Plan Pierced By Nominee And Alter Ego Theories.” The case of U.S. v. Cohen, C.D.Ill. Case No. 08-3282 (Mar. 8, 2013), chronicles an asset protection plan so frightfully poor it could only be described as the “Bulletproof A$$et Protection.” Just the label used to market this “asset protection” scheme should give pause to the prudent.
Asset protection is all about understanding the legal nature of your assets and the potential risks that may threaten your future use and enjoyment of those assets. Certainly state and federal laws offer varying degrees of protection, as do time-tested legal strategies. It’s as much art as science, but not magic.