Jay Adkisson pulls no punches in this piece in Forbes magazine on a recent decision of the Washington state supreme court.  Adkisson points out a lot that went wrong in what purported to be asset protection planning but was really a game of "hide the assets." 

I share Adkisson's view that this wasn't legitimate asset protection planning.  I used to say that asset protection planning had to be done when the seas are calm and not when the storm is raging, or even on the horizon.  I may adopt Adkisson's saying now, that asset protection is about taking "chips off the table before the hand is dealt (and not after the hand is dealt and the cards start turning up bad)."  In fact, you CAN do asset protection after the hand is dealt, but only for hands you will be dealt in the future, not for the ones you already have.  That's because asset protection transfers will be voided, as they were here, when they were done with an intent to hinder, delay or defraud known creditors. 

Adkisson also points out an issue that often floats around the water cooler of asset protection planners.  If land is located in one jurisdiction and the asset protection plan is governed by another jurisdiction, which one will control?  I've always told my clients who are looking to protect real estate that we can do asset protection planning using the jurisdiction of another state, but we have to keep in mind that it my not work because "we can't move the dirt" to the more favorable jurisdiction.  And that's just what the Washington Supreme Court decided.  Namely, that the land was in Washington so they could apply Washington law.  As a principle of law, was the Washington Supreme Court right?  My answer is, "Does it matter?".  If you have to take your case to the U.S. Supreme Court to prove your asset protection plan should have worked, haven't you already lost?

Some thoughts for this Monday morning.