Mar 1, 2007 12:00 PM, By Alexander A. Bove, Jr., partner, Bove & Langa, Boston

By: By Alexander A. Bove, Jr., partner, Bove & Langa, Boston

Asset protection planning is a moving target. Practitioners must constantly be aware of case developments and changes in the law, which must be reflected in their plans. Nevertheless, some advisors operate by rote and give every asset protection client the same basic plan: a domestic family limited partnership (or a limited liability company) funded with the client's investments and owned primarily by the offshore asset protection trust. More thoughtful advisors employ numerous other domestic and international strategies. For instance, they make creative use of powers of appointment, noncharitable family foundations, purpose trusts, domestic and offshore life insurance products, offshore (primarily Swiss) annuities and imaginative combinations thereof.

But even the finest asset protection plan can be undone if transfers made to protect assets are deemed fraudulent. (See “Fraudulent Transfers,” p. 54.) Therefore, most advisors agree that it is better to have transfers supported by fair consideration and other factors beyond debt than it is to have transfers whose primary, if not sole motivation, arguably is removing assets from creditors' reach. That can sometimes be a heavy burden — which is one of the compelling reasons why more and more advisors are considering Swiss annuities for their clients.

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