by JBA Trust and Probate Law Section Chair Stephanie Harriett
There is no doubt asset protection is controversial. However, the economic downturn has spurred an increase in interest by clients and attorneys in this area of law. Asset protection is complex and a legitimate area of law incorporating many other legal disciplines, including bankruptcy, tax, corporate, contracts, trust, creditor-debtor rights, insurance and estate planning.
Any attorney practicing in the area of asset protection must have a clear and comprehensive understanding of Florida’s Fraudulent Transfer Act.
What many of you may not realize is that there is a strong movement within our state for proposed legislation to adopt Florida Self-Settled Spendthrift Trusts or Florida Asset Protection Trusts.
Thirteen states adopted legislation allowing some form of self-settled spendthrift trusts or domestic asset protection trusts (Alaska, Colorado, Delaware, Missouri, Nevada, New Hampshire, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Wyoming and Hawaii).
The Asset Preservation Committee of the Real Property, Probate and Trust Law Section of The Florida Bar presented the proposed legislation to the Section’s Executive Council on Aug. 7. As you can imagine, there were impassioned arguments on both sides of the fence. Unfortunately, in the final vote, the proposed legislation did not receive the required votes. Thus, an effort to seek a sponsor to introduce this proposed legislation to the Florida Legislature for consideration will not be made at this time.
What I found most interesting as an observer of this meeting was the number of attorneys who shared compelling stories both in session and out about their clients who could have benefited from such legislation.
Many of the stories were not of wealthy clients trying to evade paying taxes or legitimate creditors; they were stories of hard-working families who, because of an accident or unforeseen circumstances, lost everything.
Although Florida attorneys cannot offer Florida Asset Protection Trusts to their clients, there are numerous other asset protection techniques which can be utilized to help limit liability exposure for clients.
Some techniques include: the use of foreign asset protection trusts, titling assets as tenancy by the entirety, enhancing retirement benefits, engaging in life insurance planning, the use of certain business entities, purchasing educational plans, and the use of prenuptial or postnuptial agreements.
Whether you are a supporter of asset protection planning or not, I believe we all have a duty as advisers to educate ourselves in this growing area of law. Some advocates of asset protection planning suggest that attorneys who practice in the area of estate planning and do not advise their clients in asset protection techniques may have malpractice exposure.
Although many people associate these planning techniques with estate planning, asset protection has implications in many different areas of law. Regardless of our area of practice, we all have an obligation to consider our client’s potential for risk.
The Trust and Probate Law Section for The Jacksonville Bar will present a CLE on asset protection at 1 p.m. Nov. 12.
We are fortunate to have Jerome Wolf from Boca Raton join us for this presentation. He is the co-chair of the Asset Preservation Committee of the Real Property, Probate and Trust Law Section of The Florida Bar. He will speak on asset protection trusts.
Jerome Wolf and Thomas O. Wells are both contributors to the “Asset Protection In Florida” book published by The Florida Bar Continuing Legal Education section. Wells will be joining us from Coral Gables and will be speaking about asset protection techniques using LLCs and LPs after Olmstead.
Paul Winder, Managing Director of ATC Trustees (Bahamas) Limited, will be joining us to teach us about foreign trusts.
We will conclude with a panel discussion on the ethical consideration involved in asset protection planning.
There will be a happy hour event immediately following the CLE sponsored by Jacksonville Bank where attendees will have an opportunity to meet our guest speakers and continue the discussion on asset protection techniques. For a registration form, visit http://jaxbar.org/uploads/111210Registration_rev4.pdf, or contact Stephanie Harriett at [email protected].