Generally speaking, it’s too late to do asset protection once you have a judgment against you, unless you have an arrangement to pay off the judgment (and follow through with that arrangement) and are merely planning in order to safeguard assets against future creditors.
Doing asset protection planning to thwart collection attempts post-judgment may result in you and your asset protection planner being fined by a court! Don’t do it!
Doing asset protection planning in anticipation of a judgment, bankruptcy, divorce, or an IRS assessment being reduced to judgment is possible, albeit tricky, if the storm clouds are already on the horizon, due to fraudulent transfer law. It’s much, much better to do the planning before such threats arise. However, asset protection planning in these circumstances is often still very effective – but be careful! Egregious or blatant planning may result in fines and penalties. My rule of thumb is if creditor clouds are on the horizon, retain a local attorney and have him hire the planner, so that attorney/client privilege covers the plan’s implementation. It’s a good idea for a planner to work under your attorney, regardless.
Related Links:
- What is a fraudulent transfer?
- What is the UFTA and why is it so important to asset protection?
- What are some asset protection pitfalls that could get me in trouble?