Who is your most trusted confidante? It should be your attorney. Entrepreneurs, businesses and individuals should constantly plan on the worse case, even when times are good. This is the first step to asset protection whether you have something to protect now or have in the future. Free market economies are such that there will some bubble every 7 to 10 years. These fall in line with 7 year cycles of ups and downs in all aspects of life. The easiest way to get through the down cycles is to plan during the good cycles, at the end of tough times and at the beginning of the good cycles. While some do not believe that we are at the beginning of a good cycle or simply coming to the end of a bad cycle, now is the time to make proper planning.
What are the 5 secrets you need to know? You need to maintain your documents, use the law, incorporate an estate plan, keep good financial records and know who to trust.
As a part of your asset protection plan know who your trusted relationships. These are the people in your life that are almost loyal to a fault. They are the ones that would come to your rescue at any time of the night, at any place and for any reason for no benefit. Of course, they should have a financial acumen and understand the necessity of planning and what their role is, along with confidentiality. There should be protections with the Boy Scout attitude of at least two deep. This means that setting up trustees are not just a single individual regardless how much you trust them, but provide them with the protection by having co-trustees, co-executors, co-officers of your company and the like. Your relationship should include trusted professionals where you have your trusted CPA, your trusted attorney and a trusted investment advisor. These should be people that are in your life regardless of your circumstances and are there with you for good times and bad times. Think of the people that you are going to call at 3:00 in the morning in the middle of nowhere without money and no way of getting out. It is not a matter of who can help you, but it is a matter of who is willing to drop what they are doing to come help you. These are where you are where you start building your trusted relationships which should be included in your asset protection plan.
Proper tools need to be put in place so that the ship will stay afloat regardless of what storms arise. Build your ship for smooth sailing, but keep it unsinkable during the worst of storms. In other words, do not build the Titantic, build a Zumalt-class destroyer. The Titantic was a big fancy ship of its day that was thought to be unsinkable just because someone said, but turned out to be nothing but a floating disaster. A Zumalt-class destroyer should be used metaphorically as it is designed to come in, appearing to be the size of a small fishing boat on radar, but survive the worst of storms and bring in more lethal fire power than has ever floated on the high seas. Planning should not only be handled correctly, but it should be done well and be done to last.
The bottom line with asset protection is to spend the time now to make plans regardless of your situation and it will save you ten-fold of time in the future, along with unnecessary worry and expense. Every bad business cycle that we have seen in our practice of law there have been numerous situations where we knew if we were involved years before, the problems would have never occurred or would have different outcome. This is not always the case in litigation as it is quite often unavoidable, but proper planning can sure save not only your estate, your well-being, but your personal sanity. Your attorney should be your most trusted confidante.
Stephen Fuller is the managing partner of Fuller Sloan LLC and has practiced in business litigation and consulting for 37 years and has over 25 years representation of the founder of one of the largest sit-down casual restaurants in America. For more information, send Mr. Fuller an email.