We are often asked by potential clients, “Can’t I just transfer my assets to my spouse to protect them?” We have always recommended against that “strategy” for a number of reasons, not the least of which, we tell our clients: “What if she/he decides to divorce you? You could lose it all forever.” Another significant reason is that the transfer could be easily “undone” by a court if a fraudulent transfer is found to have occurred. Thus, no asset protection.
As busy as physicians are, some attempt to save the time it might take to seek qualified advice concerning asset protection planning, and utilize the following “do-it-yourself” “methods”.
Trusts have been used since the Crusades to protect assets. The trust concept and case law are deeply embedded in English common law jurisdictions. Domestic trusts — e.g., those trusts established under the laws of a U.S. jurisdiction — provide very limited (if any) asset protection for the settlor if he is also a trust beneficiary or has retained a certain level of control over the trust.