Back in the days when I used to be a law clerk, the judge I worked for would love it when I cited very old case law in legal memos. He would say, “I hope that people are still citing my opinions in 200 years.”
Asset protection structures and mechanisms have been around for centuries. Throughout time, the wealthiest people on earth take advantage of asset protection planning. History shows that wealthy people always have pursued asset protection as a goal. A simple limited liability company, for example, is an asset protection structure. The primary reason that entities like family limited partnerships, corporations, and limited liability companies exist is to partition risk and liability and, therefore, protect assets.
Many people are unaware of the asset protection laws that are all around us. In fact, I’m often asked about the legality of certain asset protection strategies that are completely tried and true. As an asset protection attorney, I am a student of history, and I want to share a little bit about the past with respect to asset protection.
Living in Perpetuity
The word “corporation” derives from the Latin corpus. Corpus refers to a group or body of people. At least with respect to Medieval European business entities, the original idea behind a corporation was that it would allow a body of people to survive “in perpetuity” and not be limited by the lives of any single stockholder.
The Catholic Church was actually one of the first European organizations that took advantage of a “perpetual existence.” Many municipal governments, like the City of London Corporation, were also formed nearly 1,000 years ago when William the Conqueror granted the city a royal charter. In terms of commercial enterprises, the Dutch East India Company played a major role in exploring the world and issued what were probably the first stock certificates. That all happened in the 1600′s. A major feature of the Dutch East India Company was the limitation of liability for shareholders. Today we call that asset protection.
Asset Protection Has Been Around For A Long Time
The message here is that asset protection is legal. It has been around for a long, long time. Many state have adopted the policies of offshore asset protection jurisdictions. There is absolutely nothing illegal about using every advantage conferred by law for the protection of wealth. Some people question the use of offshore trusts as “taking it to the edge,” but the fact of the matter is that individuals and corporations have always availed themselves of international laws for the preservation of wealth. That’s history . . . .
The historical record, combined with the fact that privacy seems to erode more and more every day, along with wealth and assets being more accessible today than ever before, no matter where those assets are located, are factors that make asset protection an absolute necessity. In fact, the only real risk you can take is to ignore the potential benefits of placing a legal fortress around your wealth. Follow the lead of the smartest and wealthiest people who ever lived, and take the time to develop a comprehensive asset protection strategy.