ASSET PROTECTION TRUSTS CAN BE FREE OF INCOME TAX One of the unhappy facts of financial life in our lawsuit-happy society is the increasing danger of being sued. And if you should have the misfortune to wind up on the receiving end of some courtroom debacle, it could easily cost you your life savings. One of the best ways to protect yourself against such a calamity is to have an asset protection plan in advance of any problems. In the process of doing so, many people are discovering that they can eliminate most income taxes through the proper use of offshore trusts, corporations, and annuities. Tax planning alone may not have caused them to examine these techniques, but the fear of losing everything they have built up over a lifetime has driven them to investigate alternatives. Creating an asset protection plan is not expensive, and provides a great deal of assurance that you and your family will have the benefit of the money you have built up through years of work. Asset protection plans are a relatively new area of law, prepared by lawyers who specialize in protecting what you own instead of in suing people. Asset protection is different from traditional retirement or estate planning. It is the systematic and integrated protection of your family and business from risk. Most financial planning is intended to help you establish wealth so you can retire, and pass on as much of that wealth as possible to your family after death. Asset protection plans include estate plans but are intended to also help you keep your wealth while you are living. They often involve legal structures such as family limited partnerships, children's trusts, exempt assets, offshore trust arrangements and living trusts. More lawsuits are being filed today than at any time in history, and the top 80 percent of wage earners in the United States will be sued an average of five times during their lifetimes. Other situations include bankruptcy filings, taxation, insurance company failures or bank financing. Many small businesses are finding that critical financing is being pulled out from under businesses that are current in their loan payments simply because their bank has been sold or merged and no longer wants that type of loan. If someone slips and falls in a business, or if a car taps their car's rear end, they react like they just won the lottery. If an armed thug breaks into a home in the dead of night, slips on a child's marbles, and breaks a leg, he can sue and likely win. A small construction firm is having its monthly partners meeting. They send out for pizza. Their secretary decides to go pick it up. Unknown to the partners this person has a horrible driving record. On the way back the secretary runs into a group of pedestrians. The police arrive. The secretary eats the pizza and the partners are sued. A judge decides that they are liable as the secretary was performing an act for the partners in her ordinary course of employment. The jury, sympathetic to the victims and enraged by the driving record, awards several million in damages. As partners, all of the owners are jointly liable for payment. In effect, the jury has awarded the plaintiffs three condos, two sail boats, three houses, nine cars, and twelve installment notes to pay the balance over a lifetime. A land speculator bought a parcel for subdivision, held it for one week and sold it to a developer. Later, after houses were built, a homeowner who was an environmental engineer noticed an old buried drum. It contained a deadly toxin. The Environmental Protection Agency held the site to be a "superfund" site. The largest law firm in the world, Uncle Sam, began an action against the landowners. The suit brought in the land speculator. Although the total invested was only $100,000, the liability exceeded $30,000,000. Under the law this can never be discharged in bankruptcy. The builder and the developer collapsed, leaving the individual land speculator with an overwhelming judgment. Asset protection plans are not only for the wealthy. An asset protection plan can be relevant if you drive a car, have children, own a business or simply want to pay less taxes. It can come into action in the event of an auto accident, if someone injures himself at your business, or possibly in the case of a divorce. Asset protection plans are fully legal. It is not something for people who might want to avoid the law or their responsibilities. The law is clear as to what is permissible and what is not. Asset protection simply gives protection against unfair lawsuits and gives a level playing field to operate from. The goal is to structure the plan so you never have to misrepresent yourself or worry about the legality of the plan. The best way to do this is to seek the assistance of professionals, and there is now a firm that works with clients from all over the country. They can also work with your existing lawyers or accountants if you wish. For a free information package write to: Asset Protection Corporation Suite 201A 14418 Old Mill Road Upper Marlboro, Maryland 20772. People set up an asset protection plan to keep what they own, but in the process of planning, when they learn that there are ways they can accomplish protection and tax avoidance, they gain a degree of financial freedom. Even asset protection plans that are totally domestic can reduce or eliminate taxation, through such devices as income splitting by creating family limited partnerships, or the tax-deferral of annuities.